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The SCRA defines "stock exchange" by reference to its purpose. According to that definition, what is the purpose for which a stock exchange exists?
Answer & Solution
Correct answer: A.
1. The Act defines stock exchange by its purpose, not by its corporate form.
2. The purpose is assisting, regulating or controlling the business of buying, selling or dealing in securities.
3. Custody of demat securities is the depository function, defined separately under the Depositories Act, 1996.
4. Rating and auditing are intermediary functions, not stock-exchange functions.
_Source: ICSI CS Executive Paper 6 (Securities Laws and Capital Markets) — Lesson 1: Securities Contracts (Regulation) Act, 1956, pp. 4-21._
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