PART III
AMENDMENTS TO THE SECURITIES CONTRACTS (REGULATION) ACT, 1956
Commencement and amendement of Act 42 of 1956 .
160. [A] The provisions of this Part shall come into force on such date as the Central Government may, by notification, appoint and different dates may be appointed for different provisions of this Part.
Amendment of section 2.
[B] In the Securities Contracts (Regulation) Act, 1956 (42 of 1956) (herein referred to as Securities Contracts Act), in section 2,--
(i) in clause (ac), after sub-clause (B), the following sub-clauses shall be inserted, namely:--
“(C) repo and reverse repo;
(D) commodity derivatives; and
(E) such other instruments as may be declared by the Central Government to be derivatives;”;
(ii) in clause (b), the words, brackets, and figures ‘‘and having one of the forms specified in clause
(2) of section 2 of the Public Debt Act, 1944 (18 of 1944)" shall be omitted;
(iii) after clause (b), the following clauses shall be inserted, namely:--
‘(bb) “goods” mean every kind of movable property other than actionable claims, money and securities;
(bc) “commodity derivative” means a contract -
(i) for the delivery of such goods, as may be notified by the Central Government in the Official Gazette, and which is not a ready delivery contract; or
(ii) for differences, which derives its value from prices or indices of prices of such underlying goods or activities, services, rights, interests and events, as may be notified by the Central Government, in consultation with the Board, but does not include securities;’;
(iv) after clause (c), the following clause shall be inserted, namely:-- ‘(ca) “non-transferable specific delivery contract” means a specific delivery contract, the rights or liabilities under which or under any delivery order, railway receipt, bill of lading, warehouse receipt or any other documents of title relating thereto are not transferable;’;
(v) after clause (e), the following clause shall be inserted, namely:--
‘(ea) “ready delivery contract” means a contract which provides for the delivery of goods and the payment of a price therefor, either immediately, or within such period not exceeding eleven days after the date of the contract and subject to such conditions as the Central Government may, by notification in the Official Gazette, specify in respect of any goods, the period under such contract not being capable of extension by the mutual consent of the parties thereto or otherwise:
Provided that where any such contract is performed either wholly or in part;
(I) by realisation of any sum of money being the difference between the contract rate and the settlement rate or clearing rate or the rate of any offsetting contract; or
(II) by any other means whatsoever, and as a result of which the actual tendering of the goods covered by the contract or payment of the full price therefor is dispensed with, then such contract shall not be deemed to be a ready delivery contract;’;
(vi) after clause (f), the following clauses shall be inserted, namely:--
‘(fa) “repo” means an instrument for borrowing funds by selling Government securities with an agreement to repurchase the Government securities on a mutually agreed future date at an agreed price which includes interest for the funds borrowed;
(fb) “reverse repo” means an instrument for lending funds by purchasing Government securities with an agreement to resell the Government securities on a mutually agreed future date at an agreed price which includes interest for the funds lent;’;
(vii) after clause (h), the following clause shall be inserted, namely:--
‘(ha) “specific delivery contract” means a commodity derivative which provides for the actual delivery of specific qualities or types of goods during a specified future period at a price fixed thereby or to be fixed in the manner thereby agreed and in which the names of both the buyer and the seller are mentioned;’;
(viii) after clause (j), the following clause shall be inserted, namely:--
‘(k) “transferable specific delivery contract” means a specific delivery contract which is not a nontransferable specific delivery contract and which is subject to such conditions relating to its transferability as the Central Government may by notification in the Official Gazette, specify in this behalf.’.
Notes on Clauses:
Clause 160 of the Bill seeks to amend certain provisions of the Securities Contracts (Regulation) Act, 1956. It is proposed to amend section 2 of the said Act so as to amend certain definitions and to insert new definitions like “goods”, “commodity derivative”, “non-transferrable specific delivery contract”, “specific delivery contract”, etc., in the said section.
