Law · Securities Contracts (Regulation) Act, 1956
Under the Securities Contracts (Regulation) Act, 1956 (SCRA), derivative contracts are considered legal and valid only if:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1They are spot delivery contracts only
- 2They are executed outside the stock exchange without SEBI approval
- 3They are traded on a recognised stock exchange and settled through its clearing house in accordance with its rules and bye-laws✓
- 4They are traded informally between investors
Correct answer
They are traded on a recognised stock exchange and settled through its clearing house in accordance with its rules and bye-laws
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