In this Act, unless the context otherwise requires,—
(a) Contract means a contract for or relating to the purchase or sale of securities;
¹[(aa) corporatisation means the succession of a recognised stock exchange, being a body of individuals or a society registered under the Societies Registration Act, 1860 (21 of 1860), by another stock exchange, being a company incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such individuals or society;
(ab) demutualisation means the segregation of ownership and management from the trading rights of the members of a recognised stock exchange in accordance with a scheme approved by the Securities and Exchange Board of India;]
²[ ³[(ac)] derivative includes—
(A) a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security;
(B) a contact which derives its value from the prices, or index of prices, of underlying securities;]
⁴[(C) commodity derivatives; and
(D) such other instruments as may be declared by the Central Government to be derivatives;]
(b) Government security means a security created and issued, whether before or after the commencement of this Act, by the Central Government or a State Government for the purpose of raising a public loan and having one of the forms specified in clause (2) of section 2 of the Public Debt Act, 1944 (13 of 1944);
⁴[(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 as referred to in sub-clauses (A) and (B) of clause (ac);]
(c) member means a member of a recognised stock exchange;
⁴[(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;]
(d) option in securities means a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji, a mandi, a teji mandi, a galli, a put, a call or a put and call in securities;
⁵i9560(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;]
(e) prescribed means prescribed by rules made under this Act;
⁴[(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;]
(f) recognised stock exchange means a stock exchange which is for the time being recognised by the Central Government under section 4;
(g) rules, with reference to the rules relating in general to the constitution and management of a stock exchange, includes, in the case of a stock exchange which is an incorporated association, its memorandum and articles of association;
⁶[(ga) scheme means a scheme for corporatisation or demutualisation of a recognised stock exchange which may provide for—
(i) the issue of shares for a lawful consideration and provision of trading rights in lieu of membership cards of members of a recognised stock exchange;
(ii) the restrictions on voting rights;
(iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stock exchange, legal proceedings by, or against, the recognised stock exchange, whether in the name of the recognised stock exchange or any trustee or otherwise and any permission given to, or by, the recognised stock exchange;
(iv) the transfer of employees of a recognised stock exchange to another recognised stock exchange;
(v) any other matter required for the purpose of, or in connection with, the corporatisation or demutulisation, as the case may be, of the recognised stock exchange;]
⁷[ ⁸[(gb)] Securities Appellate Tribunal means a Securities Appellate Tribunal established under sub-section (1) of section 15K of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]
(h) securities include—
(i) shares, scrips stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or ⁹[ or a pooled investment vehicle or other body corporate];
¹⁰[(ia) derivative;
(ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes;]
¹¹[(ic) security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);]
¹²[(id) units or any other such instrument issued to the investors under any mutual fund scheme;]
¹³[(ida) units or any other instrument issued by any pooled investment vehicle;]br ¹⁴[Explanation.—For the removal of doubts, it is hereby declared that securities shall not include any unit linked insurance policy or scrips or any such instrument or unit, by whatever name called, which provides a combined benefit risk on the life of the persons and investment by such persons and issued by an insurer referred to in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938).]
¹⁵[(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 receiveable including mortgage debt, as the case may be;]
(ii) Government securities; and
(iii) rights or interests in securities;
¹⁶[(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;]
¹⁷[(i) spot delivery contract means a contract which provides for,—
(a) actual delivery of securities and the payment of a price therefor either on the same day as the date of the contract or on the next day, the actual period taken for the dispatch of the securities or the remittance of money therefor through the post being excluded from the computation of the period aforesaid if the parties to the contract do not reside in the same town or locality;
(b) transfer of the securities by the depository from the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository;]
¹⁸[(j) stock exchange means—
(a) any body of individuals, whether incorporated or not, constituted before corporatisation and demutualisation under sections 4A and 4B, or
(b) a body corporate incorporated under the Companies Act, 1956 whether under a scheme of corporatisation and demutualisation or otherwise,
for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities;]
¹⁹[(k) transferable specific delivery contract means a specific delivery contract which is not a non-transferable 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.]


1. Ins. by Act 1 of 2005, s. 2 (w.e.f. 12-10-2004).
2. Ins. by Act 31 of 1999, s. 2 (w.e.f. 22-2-2000).
3. Clause (aa) re-lettered as clause (ac) thereof by Act 1 of 2005, s. 2 (w.e.f. 12-10-2004).
4. Ins. by Act 20 of 2015, s. 133 (w.e.f. 14-5-2015).
5. Ins. by Act 13 of 2021, s. 148 (w.e.f. 1-4-2021).
6. Ins. by Act 1 of 2005, s. 2 (w.e.f. 12-10-2004).
7. Ins. by Act 32 of 1999, s. 2 (w.e.f. 16-12-1999).
8. Clause (ga) re-lettered as clause (gb) thereof by s. 2, ibid. (w.e.f.12-10-2004).
9. Subs. by Act 13 of 2021, s. 148, for other body corporate (w.e.f. 1-4-2021).
10. Ins. by Act 31 of 1999, s. 2 (w.e.f. 22-2-2000).
11. Ins. by Act 54 of 2002, s. 41 and the Schedule (w.e.f. 21-6-2002).
12. Ins. by Act 1 of 2005, s. 2 (w.e.f. 12-10-2005).
13. Ins by Act 13 of 2021, s. 148 (w.e.f.1-4-2021).
14. The Explanation ins. by Act 26 of 2010, s. 4 (w.e.f. 9-4-2010).
15. Ins. by Act 27 of 2007, s. 2 (w.e.f. 28-5-2007).
16. Ins. by Act 20 of 2015, s. 133 (w.e.f. 14-5-2015).
17. Subs. by Act 22 of 1996, s. 30 and the Schedule, for clause (i) (w.e.f. 20-9-1995).
18. Subs. by Act 1 of 2005, s. 2, for clause (j) (w.e.f. 12-10-2005).
19. Ins. by Act 20 of 2015, s. 133 (w.e.f. 14-5-2015).