Financial Daily from THE HINDU group of publications
Saturday, Sep 18, 2004
Financial Daily from THE HINDU group of publications Saturday, Sep 18, 2004 |
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Policy Markets - Stock Exchanges Nod for Ordinance to amend Securities Contracts Act — Way paved for corporatisation, demutualisation of exchanges Our Bureau
New Delhi , Sept. 17 THE Union Cabinet on Friday gave its nod for the promulgation of an Ordinance to amend the Securities Contracts (Regulation) Act, 1956 (SCRA), which would pave the way for corporatisation and demutualisation of stock exchanges in the country. The Ordinance would also amend the Depositories Act 1996. Approval for the introduction of a Bill to replace the Ordinance in the ensuing session of Parliament was also given by the Cabinet. Briefing newspersons on the decision, the Union Finance Minister, Mr P. Chidambaram, said that the SCRA is being amended to implement the policy of corporatisation and demutualisation of stock exchanges. Further, the definition of "securities" is also to be amended in both the SCRA and the Depositories Act to include "units of mutual funds." Asked about the need to promulgate an Ordinance, Mr Chidambaram pointed out that the Joint Parliamentary Committee that probed the securities scam of 2001 had recommended that the process of corporatisation and demutualisation of stock exchanges should be implemented expeditiously. He held that the Ordinance was being promulgated to prevent certain undesirable transactions in the stock exchanges and to ensure efficient functioning of the capital market. Ordinance on banking: The Union Cabinet also approved an Ordinance - Banking Regulation (Amendment and Miscellaneous Provisions) Ordinance 2004 — to amend the Banking Regulation Act, 1949 to enable the Reserve Bank of India to issue licence to Multi-State Cooperative Societies to carry on banking business. The Finance Minister said that the Ordinance is being promulgated to regularise the licences, issued by the RBI to multi-State co-operative societies, in view of the Supreme Court judgment. He said that the Supreme Court had held that the RBI cannot issue banking licences to co-operative societies under the Multi State Co-operative Societies Act. Nod for GTB-OBC merger: The Union Cabinet also gave its post-facto approval for the amalgamation of the Global Trust Bank with the Oriental Bank of Commerce.
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