GOVERNMENT OF KERALA

Law (Legislation Publication) Department

NOTIFICATION

No. 22381/Leg. Pbn. 4/2007/Law.

Dated,Thiruvananthapuram,15th October 2007.

The following Act of Parliament, Published in the Gazette of India,

Extraordinary, Part II, Section I, dated the 29th May, 2007 is hereby

republished for general information.

The Bill as passed by the Houses of

Parliament received the assent of the President on the 28th May, 2007.

By order of the Governor,

P. S. GOPINATHAN,

Law Secretary.

G/1066/2007/DTP.

Kerala Gazette No. 7 dated 12th February 2008.

PART I

Section i

2

THE SECURITIES CONTRACTS (REGULATION) AMENDMENT

ACT, 2007

(ACT NO. 27 OF 2007)

AN

ACT

further to amend the Securities Contracts (Regulation) Act, 1956.

BE it enacted by parliament in the Fifty eighth year of the Republic of

India as follows:—

1.

Short title.—This Act may be called the Securities Contracts

(Regulation) Amendment Act, 2007.

2.

Amendment of section 2.—In section 2 of the Securities contracts

(Regulation) Act, 1956 (42 of 1956) (hereinafter referred to as the principal

Act), in clause (h), after sub-clause (id), the following sub-clause shall be

inserted, namely:—

“(ie) any certificate or instrument (by whatever name called), issued to

an investor by any issuer being a special purpose distinct entity which

possesses any debt or receivable, including mortgage debt, assigned to such

entity and acknowledging beneficial interest of such investor in such debt or

receivable including mortgage debt, as the case may be;”.

3.

Insertion of new section 17A.—After section 17 of the principal Act,

the following section shall be inserted, namely:—

“17A. Public issue and listing of securities referred to in sub-clause

(ie) of clause (h) of section 2.—(1)Without prejudice to the provisions

contained in this Act or any other law for the time being in force, no

securities of the nature referred to in sub-clause (ie) of clause (h) of section 2

shall be offered to the public or listed on any recognised stock exchange

unless the issuer fulfills such eligibility criteria and complies with such other

requirements as may be specified by regulations made by the Securities and

Exchange Board of India.

(2) Every issuer referred to in sub-clause (ie) of clause (h) of section

2 intending to offer the certificates or instruments reffered therein to the

public shall make an application, before issuing the offer document to the

public, to one or more recognised stock exchanges for permission for such

certificates or instruments to be listed on the stock exchange or each such

stock exchange.

3

(3) Where the permission applied for under sub-section (2) for listing

has not been granted or refused by the recognised stock exchanges or any of

them, the issuer shall forthwith repay all moneys, if any, received from

applicants in pursuance of the offer document and if any such money is not

repaid within eight days after the issuer becomes liable to repay it, the issuer

and every director or trustee thereof, as the case may be, who is indefault

shall, on and from the expiry of the eighth day, be jointly and severally liable

to repay that money with interest at the rate of fifteen per cent. per annum.

Explanation.—In reckoning the eighth day after another day, any

intervening day which is a public holiday under the Negotiable Instruments

Act, 1881 (26 of 1881) shall be disregarded, and if the eighth day (as so

reckoned) is itself such a public holiday, there shall for the said purposes be

substituted the first day thereafter which is not a holiday.

(4) All the provisions of this Act relating to listing of securities of a

public company on a recognised stock exchange shall, mutatis mutandis,

apply to the listing of the securities of the nature referred to in sub-clause

(ie) of clause (h) of section 2 by the issuer, being a special purpose distinct

entity.

4.

Amendment of section 23.—In section 23 of the Principal Act, in

sub-section (l), in clause (c), for the word and figures “section 17”, the

words, figures and letter “section 17 or section 17A” shall be substitued.

5.

Amendment of section 31.—In section 31 of the principal Act, for

sub-section (2), the following sub-section shall be substituted, namely:—

“(2) In particular, and without prejudice to the generality of the

foregoing power, such regulations may provide for all or any of the following

matters, namely:—

(a)

the manner, in which at least fifty-one per cent of equity share

capital of a recognised stock exchange is held within twelve

months from the date of publication of the order under sub-

section (7) of section 4B by the public other than the

shareholders having trading rights under sub-section (8) of that

section;

(b) the eligibility criteria and other requirements under section

17A.”.