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Home Acts & Rules Bill Bills FINANCE BILL, 2021 Chapters List Part IV AMENDMENTS TO THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 This
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Clause 139 - Amendment of section 2. - FINANCE BILL, 2021

FINANCE BILL, 2021
Part IV
AMENDMENTS TO THE SECURITIES CONTRACTS (REGULATION) ACT, 1956
  • Contents

Amendment of section 2.

139. In the Securities Contracts (Regulation) Act, 1956 (42 of 1956.) (hereafter in this Part referred to as the principal Act), in section 2,––

(i) after clause (d), the following clause shall be inserted, namely:––

‘(da) “pooled investment vehicle” means a fund established in India in the form of a trust or otherwise, such as mutual fund, alternative investment fund, collective investment scheme or a business trust as defined in sub-section (13A) of section 2 of the Income-tax Act, 1961 (43 of 1961.) and registered with the Securities and Exchange Board of India, or such other fund, which raises or collects monies from investors and invests such funds in accordance with such regulations as may be made by the Securities and Exchange Board of India in this behalf;’;

(ii) in clause (h),––

(a) in sub-clause (i), for the words “other body corporate”, the words “or a pooled investment vehicle or other body corporate” shall be substituted;

(b) after sub-clause (id), the following sub-clause shall be inserted, namely:––

“(ida) units or any other instrument issued by any pooled investment vehicle;”.

 



 

Notes on Clauses:

Clauses 138 to 140 of the Bill seeks to amend the provisions of the Securities Contracts (Regulation) Act, 1956.

It is proposed to define the expression “pooled investment vehicle”. It is further proposed to clarify that debt securities and such other marketable securities as well as the units issued by pooled investment vehicles are “securities”.

It is also proposed to insert a new section 30B in the said Act to specify that a pooled investment vehicle, whether constituted as a trust or otherwise, shall be eligible to borrow and issue debt securities and shall be permitted to provide security interest to lenders, in terms of the facility documents, entered into by such pooled investment vehicles. It further provides that in case of default, the lenders shall recover the defaulted amount against the trust assets, by initiating proceedings against the trustee acting on behalf of the pooled investment vehicle, and whatever remains after paying the lenders shall be remitted to the unit holders.

These amendments will take effect from 1st April, 2021.

 
 
 
 
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