 the securities contracts (regula~ tion) amendment bill~ 1'58(as introducbd in lok sabha)  the securities contracts (regulation) amendment bill, 1958 (as introduced in lok sabha)a bill to amend the securities ccmtracts (regulation) act, 1956 be it enacted by i\lriiament in the ninth year of the republic of india as follows:-] this act may be called the securities contracts (regulation) short title amendment act, 1958 5 2 after section 7 of the securities contracts (regulation) act, insertlo!ttof 1956 (hereinafter referred to as the principal act), the following ~~~ on 420( 1956 10 section shall be inserted, namely:-"7a (1) a recognised stock exchange may make rules or pow«i:j emend any rules made by it to provide for all or any of the follow- =r exing matters, namely:-chank&crulto  mae e8 (a) the restriction of voting rights to members only in res~ictidg f th votmg respect 0 any matter placed before e stock exchange at rishts etc any meeting; is (b) the regulation of voting rights in respect of any matter placed before the stock exchange at any meeting so that each member may be entitled to have one vote only, irrespective of his share of the paid-up equity capital of the stock exchange; 20 (c) the restriction on the right of a member to appoint another person as his proxy to attend and vote at a meeting of the stock exchange; (d) such incidental, consequential and supplementary matters as may be necessary to give effect to any of the matters specified in clauses (a), (b) and (c)  (2) no rules of a recognised stock exchange made or amended in relation to any matter referred to in clauses (a) to (d) of sub-section (1) shall have effect until they have been approved by the central government and published by that government in the official gazette and, in approving the rules so made or 5 amended, the central government may make such modifications therein as it thinks fit, and on such publication, the rules as approved by the central government shall be deemed to have been validly made, notwithstanding anything to the contrary contained in the companies act, 1956" 101 of 1956 amendment 3 section 28 of the principal act shall be re-numbered as subolleman 28 section (1) thereof and after sub-section (1) as so re-numbered, the following sub-section shall be inserted, namely:-"(2) the central government may, by notification in the officiol gazette, declare that all or any of the provisions of this 15 act shall not apply to any such international financial institution or financial institution set up in a country outside india as may be specified in the notification or any person who has effected any transaction with or through the agency of any such institution, either generally or for such period as may be specified" 20  statement of objects and reasonsone of the most common methods of raising funds in capital exporting countries, like the united states, united kingdom and canada, is the issue of convertible bonds or bonds with share warrant& attached it is usual for foreign financial corporations to make an ordinary loan to a company and also obtain by separate contract an option (not from the company itself but from the principal shareholder or shareholders) to buy shares of the company at a price agreed when the contract is made doubts may arise whether such contracts would be legal in view of section 13 of the securities contracts (regulation) act, 1956 further, section 20 of the act whjch makes options in securities illegal may also apply to the option'j involved in such contracts from the very nature of such contracts they are not speculative in character and it was not the intention of the act to hamper the operations of foreign financial corporations it is, therefore, proposed to amend section 28 of the act so as to empower the central government to exempt such financial corporations from all or such of the provisions of the act as it thinks fit 2 the provisions contained in the companies act 1956, which are designed to govern and regulate the affairs of companies in general, are unsuitable, in a large measure, to incorpo:mted stock exchanges recognised under the securities contracts (regulation) act, 1956 it is thus necessary to specifically empower such recognised stock exchanges to make such provisions in their constitutions as would satisfy their requirements, by a suitable amendment to the securities contracts (regulation) act, 1956 which would override the companies act it is, therefore, proposed to empower recognised stock exchanges to make rules restricting voting rights to members only, restricting the right to appoint proxies and introducing the principle of one member-one vote the bill seeks to achieve the above objects morarji desai new delhi; the 28th n o",mber, 1951  memorandum regarding delegated legislationthe proposed section 7a sgught to be iaserted by clause 2 ot the bill empowers a recognised stock exchange to make rulas in rt$pec~ of certain matters specuied therein they relate to tl\e regulation of voting rights ()f the members of the stock exchange these ere matters which are ordinarily provided for in the rules of the ~k exchange as these rules would be inconsistent with the prqvisions of the companies act, 1~, a specific pt'ovisoion has been made in subsection (2) of section 7a that if such rules are approved by the central government and published in the official gazette, they shall have effect, notwithstanding anything contained in the companies act having regard to the nature of functions ~fol'med by recognised stock exchanges, such rules are essential there would, however, be different rules for different stock exchanges and it would not be possible to provide for such matters in the enactment itself in these circumstances, the rule-making power is of a normal character  annexure extract from the securities contracts (regulation) act, 1958 (no 42 of 1956) - • - •28 the provisions of this act shall not apply to the government, act d~ to the reserve bank of india, any local authority or any corporation set =, :-up under a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this section  - - - -  a billto amend the securities contracts (regulation) act, 1956 (shri morarji desai, minister of financt) 