9911796707
TMI Blog2014 (5) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... They provide a platform for investors to transact in securities. The probity and integrity of the functioning of stock exchanges deeply reflects upon the sense of confidence which investors have in the securities market. These investors are not just individual investors but institutional investors. Investments in the stock market are not confined to national boundaries but have a transnational character. Institutional decisions to invest in the stock market have a close and integral connection with the state of the economy, financial stability and the nature of regulatory governance. The market for securities has an integral connection with the allocation of capital and financial resources in a modern economy. Anything which affects the stability of the capital market has an impact on investor wealth and can severely imperil a stable financial order. Hence, the requirements which have been imposed by the SECC regulations must be assessed in the backdrop of the need to ensure transparency in the functioning of the securities market. Coupled with this is a felt necessity of ensuring the financial stability of stock exchanges, the dispersal of ownership and the avoidance of conflicts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 Referred to in the judgment as the SECC Regulations. These regulations have been framed by the Securities and Exchange Board of India "SEBI" in exercise of statutory powers conferred by two legislative enactments: the Securities Contracts (Regulation) Act, 1956 "SCRA" and the Securities and Exchange Board of India Act, 1992. "SEBI Act". The first petitioner before the Court is a society registered under the Societies Registration Act, 1860 and is an association representing the interests of stock exchange brokers whose members are stated to have been engaged in trading shares and securities on the Regional Stock Exchange at Kanpur. The second petitioner is its President, while the third petitioner is a trading Member and Director of the governing body of the Uttar Pradesh Stock Exchange Limited, a body corporate, which is impleaded as the second respondent to these proceedings. The challenge has been confined at the hearing to the validity of Regulations 6, 7, 14, 16, 17, 19, 20, 21(1)(b), 23, 24 and 25. The validity of the regulations has been challenged on four grounds: (i)the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) The application under regulation 4 shall be governed by the provisions of the Act, rules and these regulations. (2) An applicant seeking recognition as a stock exchange or clearing corporation shall comply with the following conditions, namely:-- (a) the applicant is a company limited by shares; (b) the applicant is demutualised; (c) the applicant, its directors and its shareholders who hold or intend to hold shares, are fit and proper persons as described in regulation 20; (d) the applicant satisfies requirements relating to ownership and governance structure specified in these regulations; (e) the applicant satisfies net worth requirements specified in these regulations; (f) the applicant satisfies requisite capability including its financial capacity, functional expertise and infrastructure. Explanation.--For the purposes of this sub-regulation, the term "demutualised" means that the ownership and management of the applicant is segregated from the trading rights or clearing rights, as the case may be, in terms of these regulations. (3) An applicant seeking recognition as a stock exchange shall, in addition to conditions as specified in sub-regulations (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chieve a minimum net worth of one hundred crore rupees within a period of three years from the date of commencement of these regulations." A similar requirement is imposed in respect of the recognition of a clearing corporation by clause (2). Under clause (4), a recognized stock exchange is not allowed to distribute profits in any manner to its shareholders, unless the net worth requirement is achieved. Explanation I defines the expression "net worth of a stock exchange" as follows: "Explanation I.--For the purposes of this regulation, ''net worth of a stock exchange' means the aggregate value of paid up equity share capital plus free reserves (excluding statutory funds, benefit funds and reserves created out of revaluation) reduced by the investments in businesses, whether related or unrelated, aggregate value of accumulated losses and deferred expenditure not written off, including miscellaneous expenses not written off." Ownership Chapter IV of the SECC Regulations prescribes requirements in regard to the ownership of stock exchanges and clearing corporations. Regulation 16 (1) contains a stipulation that the shareholding or voting rights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utside of a recognised stock exchange provided it is not an initial allotment of shares; II. If the recognised stock exchange is listed, the transactions by a foreign institutional investor shall be done through the recognised stock exchange where such shares are listed. (5) No clearing corporation shall hold any right, stake or interest, of whatsoever nature, in any recognised stock exchange. Hence, under Regulation 17 restrictions have been laid down under which: (i)at least 51 percent of the paid up equity share capital of a recognized stock exchange shall be held by the public; (ii)a person resident in India cannot hold more than 5 percent of the paid up equity share capital directly or indirectly, either individually or together with persons acting in concert; (iii)in the case of stock exchanges, depositories, banking companies, insurance companies and public financial institutions, a cap of 15 percent is provided for holding of paid up equity share capital in a recognized stock exchange; (iv)a person resident outside India is subject to a cap of 5 percent of the holding of equity share capital in a recognized stock exchange; and (v) the combined holding of all persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of the expiry of the period specified in the order has not elapsed; (v) any other order against the person, or any of its whole time directors or managing partners, which has a bearing on the securities market, has been passed by the Board or any other regulatory authority, and a period of three years from the date of the order has not elapsed; (vi) the person has been found to be of unsound mind by a court of competent jurisdiction and the finding is in force; and (vii) the person is financially not sound. (2) If any question arises as to whether a person is a fit and proper person, the Board's decision on such question shall be final." Under Regulation 21, every recognized stock exchange has to disclose to SEBI its shareholding on a quarterly basis including the names of ten largest shareholders together with the number and percentage of shares held and the names of shareholders falling under Regulations 17 and 18, who had acquired shares in that quarter. Governance Chapter V of the SECC Regulations makes provisions for governance of stock exchanges and clearing corporations. Regulation 23 contains stipulations about the composition of governing board. Under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the stock exchange is empowered to determine the qualifications, manner of appointment, terms and conditions of appointment and other procedural formalities for the selection and appointment of a managing director, subject to guidelines issued by SEBI. The tenure of a managing director is not to exceed five years and is to be not less than three years. Clause (4) of Regulation 25, inter alia, contains the prohibitions on a managing director being a shareholder, trading member or holding a position concurrently in a subsidiary of or an associated entity of a recognized stock exchange: "(4) The managing director of a recognised stock exchange or a recognised clearing corporation shall not-- (a) be a shareholder or an associate of a shareholder of a recognised stock exchange or recognised clearing corporation or shareholder of an associate of a recognised stock exchange or recognised clearing corporation, as the case may be; (b) be a trading member or a clearing member, or his associate and agent, or shareholder of a trading member or clearing member or shareholder of an associate and agent of a trading member or a clearing member; or (c) hold any position concurrently in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock exchange and having regard to the area served by the stock exchange and its standing and the nature of the securities dealt with by it, may impose for the purpose of carrying out the objects of this Act; and (c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stock exchange; it may grant recognition to the stock exchange subject to the conditions imposed upon it as aforesaid and in such form as may be prescribed. (2) The conditions which the Central Government may prescribe under clause (a) of sub section (1) for the grant of recognition to the stock exchanges may include, among other matters, conditions relating to,-- (i) the qualifications for membership of stock exchanges; (ii) the manner in which contracts shall be entered into and enforced as between members; (iii) the representation of the Central Government on each of the stock exchanges by such number of persons not exceeding three as the Central Government may nominate in this behalf; and (iv) the maintenance of accounts of members and their audit by chartered accountants whenever such audit is required by the Central Government." Section 5 provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was introduced into the SCRA so as to empower SEBI to issue directions to stock exchanges as well as to companies whose securities are listed or proposed to be listed in a recognized stock exchange, in the interest of investors and of the securities market, if SEBI is satisfied that it is necessary (a) in the interest of investors or orderly development of the securities market; (b) to prevent the affairs of a recognized stock exchange being conducted in a manner detrimental to the interests of investors or the securities market; or (c) to secure the proper management of a stock exchange. Section 29A Act 15 of 1992 as substituted by Act 31 of 1999 w.e.f. 22 February 2000 was introduced by a Parliamentary amendment to enable the Central Government to delegate its powers under the Act (except for the rule making power) to SEBI or to the Reserve Bank of India. Section 29A provides as follows: "29A. Powers to delegate.- The Central Government may, by order published in the Official Gazette, direct that the powers (except the power under section 30) exercisable by it under any provision of this Act shall, in relation to such matters and subject to such conditions, if any, as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 11 (1) of the SEBI Act provides that it shall be the duty of SEBI to protect the interests of investors in securities and to promote the development of, and to regulate the securities market by such measures as it deems fit. Sub-section (2) which provides illustrations of measures which SEBI may adopt, includes in clause (j): "(j) Performing such functions and exercising such powers under the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), as may be delegated to it by the Central Government;" Consequently, the delegation of powers of the Central Government which is contemplated under Section 29A of the SCRA finds a reflection in the corresponding provisions of Section 11 (2) (j) of the SEBI Act. Under Section 30 (1), SEBI is empowered to make regulations consistent with the provisions of the SEBI Act and the rules made thereunder, to carry out the purposes of the Act. Delegation to SEBI of the powers of Central Government In exercise of the powers which were conferred by Section 29A of the SCRA, the Central Government issued a notification on 30 July 1992 directing that the powers exercisable by it under Section 4 (5), Section 7 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge Board of India & Anr. (2013) 1 SCC 1) to be "the heart and soul" of the SEBI Act. Construing the width and amplitude of the provisions contained in Section 11 (1) of the SEBI Act, Hon'ble Mr. Justice J.S. Khehar observed as follows: "...It is, therefore, apparent that the measures to be adopted by SEBI in carrying out its obligations are couched in open-ended terms, having no pre-arranged limits. In other words, the extent of the nature and the manner of measures which can be adopted by SEBI for giving effect to the functions assigned to SEBI, have been left to the discretion and wisdom of SEBI. It is necessary to record here, that the aforesaid power to adopt "such measures as it thinks fit" to promote investors' interest, to promote the development of the securities market and to regulate the securities market, has not been curtailed or whittled down in any manner by any other provisions under the SEBI Act, as no provision has been given overriding effect over sub-section (1) of Section 11 of the SEBI Act." Ultra Vires challenge Viewed in this background, it is not possible to accede to the submission that the SECC Regulations supplant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fleckner, in an article published in Fordham Law Review titled 'Stock Exchanges at the Crossroads23 describe stock exchanges as 'market organizers'. In a significant measure, stock exchanges allocate capital. The prices of securities traded in the stock market provide a foundation for an efficient allocation of financial resources by bringing together innumerable investors who seek through their decisions to invest and disinvest, a measure of liquidity. While providing a platform to investors to transact in securities, stock exchanges in the cumulative effect of their functions allocate capital resources. A stock exchange at one level provides a transaction facility for individual investors. At a macro level, stock exchanges determine through the interplay of market forces capital allocation in the economy. Volatality in the stock market disturbs both the equilibrium and balance in the efficient allocation of resources for the economy. Traditionally, stock exchanges provided platforms for transactions in securities on the floor of the exchange where brokers met, negotiated and agreed upon the prices for stock transfers executed for their principals. With modern techno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et Infrastructure Institutions (MIIs). The report of the Jalan Committee in 2010 adverted to the position of these institutions as constituting "the nucleus of (the) capital allocation system", indispensable for economic growth and constituting a part of the vital economic infrastructure. The Jalan Committee noted that unlike typical financial institutions, the number of stock exchanges, depositories and clearing corporations in an economy is limited due to the nature of their business. Any failure of those institutions could lead to bigger cataclysmic collapses that may result in an overall economic downfall that could potentially extend beyond the boundaries of the securities market and the country. The Jalan Committee characterized the price signals produced by stock markets as partaking of a public good. The price signals produced by these institutions was, in the view of the Committee, something which must be accessible to every one and must be governed by a transparent and efficient market economy. Unless the prices are fair, that would result in the expropriation of unjust profits by any one side to the transaction. The Jalan Committee observed that the nature of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investments. Hence, net worth is one of the important eligibility criteria for setting up an MII. It is required for meeting the initial capital required towards infrastructure and ensures that only serious players enter this arena. SEBI has already prescribed a net worth requirement of ₹ 100 crores for depositories..." Hence, the Committee recommended that stock exchanges must have a net worth of ₹ 100 crores at all times. The view of the Jalan Committee on net worth was that a market infrastructure institution should be a well capitalized entity, so that this net worth is available as a last resort to meet exigencies and to ensure that it is able to remain as a going concern. The Jalan Committee was set up on 6 January 2010. The report of the Committee was submitted on 22 November 2010 after a wide ranging consultation involving all stakeholders. The report was placed on the website of SEBI on 23 November 2010. The Federation of Indian Stock Exchanges furnished its response on 25 December 2010 to SEBI. The agenda for the SEBI Board of 2 April 2012 included the comments of the Jalan Committee and the responses of various stakeholders. SEBI made its recommendat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greed that at least fifty one percent of the equity shares would be held by the public with a cap of five percent for each individual shareholder. The governing board was recast to limit the number of trading members. Hence, even prior to the enforcement of SECC Regulations, the public share holding of the second respondent was 51 percent. The dilution of shareholding rights was, therefore, as urged by the learned ASG, a fait accompli and there was no challenge either to demutualisation or to the MIMPS Regulations 2006. This analysis would indicate the reasons which led to the issuance of the SECC Regulations. SEBI, in making the regulations, was guided by the overwhelming public interest of protecting the interest of investors and in ensuring the orderly functioning of the securities market. The expert regulator was guided, at every stage, by its own administrative experience in regulating the stock market. The conflicts of interest within stock exchanges, the impact of those conflicts on the stability of the securities market and the grave potential for danger by the concentration of power were within the knowledge of SEBI. That the fears of SEBI were not unreal is a matter born ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slation has to continuously evolve to keep pace with the challenges thrown up by the financial environment and the rapidly changing economic landscape. The reason why courts grant a degree of autonomy and discretion to the financial regulator is because of the realization of the enormous challenges before the regulator on designing regulatory measures and to continuously update them in the light of experiences gained, challenges presented and developments envisioned for the future. So long as the regulator has kept within the bounds of the statute, the court would defer to its expertise. Finally, as a Bench of seven learned Judges of the Supreme Court held in R.S. Joshi etc. Vs. Ajit Mills Ltd. & Anr. AIR 1977 SC 2279: "...A law has to be adjudged for its constitutionality by the generality of cases it covers, not by the freaks and exceptions it martyrs..." Now, to Article 19 (1) (c). In All India Bank Employees' Association Vs. The National Industrial Tribunal (Bank Disputes), Bombay, & Ors. AIR 1962 SC 171, a bench of seven learned Judges of the Supreme Court, while interpreting Article 19 (1) (c), held that: "...It is one thing to interpret each of the fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' Cooperative Society Ltd. & Ors. (1997) 3 SCC 681; (vi) Dharam Dutt & Ors. Vs. Union of India & Ors. (2004) 1 SCC 712; and (vii) Andhra Pradesh Dairy Development Corporation Federation Vs. B. Narasimha Reddy & Ors (2011) 9 SCC 286. In O.K. Ghosh (supra), the Supreme Court considered the validity of Rule 4B of the Central Civil Services (Conduct) Rules, 1955, under which a government servant was prohibited from joining or continuing to be a member of a service association which had not obtained recognition of the government or whose recognition had been refused or withdrawn by government. The Supreme Court held as follows: "It is not disputed that the fundamental rights guaranteed by Art. 19 can be claimed by Government servants. Art. 33 which confers power on the Parliament to modify the rights in their application to the Armed Forces, clearly brings out the fact that all citizens, including Government servants, are entitled to claim the rights guaranteed by Art. 19. Thus, the validity of the impugned rule has to be judged on the basis that the respondent and his co-employees are entitled to form Associations or Unions. It is clear that Rule 4-B imposes a restriction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only if it is held to include within it the right to continue the Association with its composition as voluntarily agreed upon by the persons forming the Association." In L.N. Mishra Institute of Economic Development and Social Changes (supra), the Act of the State legislature took over an institute which had been formed by a society registered under the Societies Registration Act, 1860. Repelling the challenge to constitutional validity, the Supreme Court distinguished the decision in Damyanti Naranga (supra) and held as follows: "The decision in Damyanti case (supra) has no manner of application to the facts of the present case. In that case, the composition of the Society was interfered with by introducing new members, which was construed by this Court as interference with the fundamental right of the Society to form association and to continue the same. In the instant case, the composition of the Society has not been touched at all. All that has been done is to nationalise the Institute of the Society by the acquisition of the assets and properties relating to the Institute. The Society may constitute its governing body in accordance with its rules without any interf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a particular object or running a particular institution, the same being a concomitant or concomitant to a concomitant of a fundamental right, but not the fundamental right itself. The associations or unions of citizens cannot further claim as a fundamental right that they must also be able to achieve the purpose for which it has come into existence so that any interference with such achievement by law shall be unconstitutional, unless the same could be justified under Article 19 (4) as being a restriction imposed in the interest of public order or morality; (ii) A right to form associations guaranteed under Article 19 (1)(c) does not imply the fulfillment of every object of an association as it would be contradictory to the scheme underlying the text and the frame of the several fundamental rights guaranteed by Part III and particularly by the scheme of guarantees conferred by sub-clauses (a) to (g) of clause (1) of Article 19; (iii) While right to form an association is to be tested by reference to Article 19(1)(c) and the validity of restriction thereon by reference to Article 19(4), once the individual citizens have formed an association and carry on some activity, the valid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticle 19. The activity was of the Society and the Society cannot claim a fundamental right. Even otherwise, the impugned legislation is a reasonable legislation enacted in the interest of the general public and to govern an institution of national importance. It is valid." In Andhra Pradesh Dairy Development Corporation Federation (supra), the Supreme Court after adverting to the earlier decisions, held thus: "... the right of citizens to form an association is different from running the business by that association. Therefore, the right of individuals to form a society has to be understood in a completely different context. Once a co- operative society is formed and registered, for the reason that co-operative society itself is a creature of the statute, the rights of the society and that of its members stand abridged by the provisions of the Act. The activities of the society are controlled by the statute. Therefore, there cannot be any objection to statutory interference with their composition or functioning merely on the ground of contravention of individual's right of freedom of association by statutory functionaries." The challenge was on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rachar Samit, the Act failed to make any provision for restoration of the elected body. New members were introduced into the Samiti, no norms were laid down for nominating the government nominees, and elected members were kept away from the control of the Samiti. This distinction was noted in the subsequent decision of the Supreme Court in Dharam Dutt (supra). On the other hand, what the decision in C.O.D. Chheoki Employees Cooperative Society (supra) emphasised is that where persons come together to associate under the umbrella of a legislation such as the Cooperative Societies Act, their rights are governed by the provisions of the statute and membership is subject to the Act, the rules and the bye-laws. Having chosen to seek the benefit of an association which is recognised by a State enactment, persons who choose to associate together by forming an entity which is recognised under the enactment, are necessarily governed by the rights, duties and obligations which are cast by the enactment. This distinction is emphasised in the judgment in the Andhra Pradesh Dairy Development Corporation Federation case. The right to form an association cannot be infringed by a forced-impositio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change, to continue its functions. This is also evident from the terms of clause 4 of the circular issued by SEBI on 30 May 2012. The first petitioner is a society of traders or brokers allegedly engaged in trading with the second respondent which is a regional stock exchange at Kanpur. The stock exchange is defunct with little or no activity. Be that as it may, we have addressed the constitutional challenges squarely to analyze whether there is any substance in the submission. Article 19 (1) (g) of the Constitution The submission of the petitioners is that the regulations are excessively restrictive and would amount to a prohibition. It has been submitted that no regional stock exchange can meet the requirement of a net worth of ₹ 100 crore. The test of proportionality must be applied to a restriction on a fundamental right imposed under Article 19 (1)(g) of the Constitution and the least intrusive means must be adopted. The restrictions on ownership and on voting rights, it is asserted, is abhorrent to the fundamental right under Article 19 (1) (g). Similarly, the dispersal of ownership to the effect that 51 percent of the paid up equity capital be held by the public, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be a fit and proper person for the grant of a licence for reasons to be recorded in writing. In determining whether the applicant is a fit and proper person, the Commission was empowered to take into account any consideration as it deems fit including but not limited to (i) the financial integrity of the applicant; (ii) competence; (iii) reputation and character; and (iv) efficiency and honesty. The Supreme Court held that a disqualifying statute must be definite and not ambiguous, uncertain or vague. The Supreme Court came to the conclusion that clauses (b) and (f) of Regulation 6A did not meet the test of reasonableness. Regulation 6A, it was emphasized, could not be justified as being in the interest of a consumer because a trader of electricity does not deal with consumers but is merely an intermediary between a generating company and a distribution licensee. As a matter of fact, the attention of the Supreme Court was drawn to the fact that the 'fit and proper person' criterion has been applied in the context of regulations framed by SEBI. The use of that concept in the SEBI regulations was distinguished by the Supreme Court on the ground that the purpose and object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors. Vs. S. Srinivasan (2012) 7 SCC 683, the Supreme Court has enunciated that a rule which supplants any provision of the statute, becomes ultra vires. Similarly, in considering the vires of the regulation, it is necessary to consider the nature, object and scheme of the enabling Act, the power conferred under the rule, the concept of purposive construction and the discretion vested in delegated bodies. We have prefaced our discussion of the constitutionality of the SECC Regulations by an analysis of the importance of the role which is ascribed to stock exchanges. Stock exchanges are, as the Jalan Committee observed, vital elements of the economic infrastructure of a modern economy. They provide a platform for investors to transact in securities. The probity and integrity of the functioning of stock exchanges deeply reflects upon the sense of confidence which investors have in the securities market. These investors are not just individual investors but institutional investors. Investments in the stock market are not confined to national boundaries but have a transnational character. Institutional decisions to invest in the stock market have a close and integral connection with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the subordinate legislation. This must also apply to the manner in which the net worth is to be calculated. Nothing has been indicated before the Court to establish that the determination of the threshold or the manner of its computation is untenable and is so disproportionately high so as to constitute the very negation of the right to carry on business. The restrictions which have been imposed in Chapter IV on the ownership of stock exchanges is with a rationale. SEBI was acting within its statutory realm in forming the view that the orderly development and functioning of the securities' market require that at least 51 percent of the paid up capital should be held by the public. The restrictions on holding share capital are intended to ensure that the shareholder does not use a position of dominance to place himself in a position which is liable to give rise to a conflict of interest. Dispersal of ownership can legitimately be an integral part of a policy which seeks to create a barrier to subversion. We have carefully considered the challenge to the fit and proper person criterion. Regulation 20 (1) SECC Regulations stipulates when a person shall be deemed to be fit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR 1961 SC 21, Mr. Justice Subba Rao (as the learned Chief Justice then was) emphasized the role and importance of a stock exchange in the following observations: "...The history of stock exchanges in foreign countries as well as in India shows that the development of joint stock enterprise would never have reached its present stage but for the facilities which the stock exchanges provided for dealing in securities. They have a very important function to fulfill in the country's economy. Their main function, in the words of an eminent writer, is "to liquify capital by enabling a person who has invested money in, say, a factory or a railway, to convert it into cash by disposing of his share in the enterprise to someone else". Without the stock exchange, capital would become immobilized. The proper working of a stock exchange depends upon not only the moral stature of the members but also on their calibre... If the stock exchange is in the hands of unscrupulous members, the second and third categories of contracts to buy or sell shares may degenerate into highly speculative transactions or, what is worse, purely gambling ones ... These mischievous potentialities ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
