The term “securities” has been defined under Section 2(h) of the Securities Contracts (Regulation) Act, 1956 to include:

1.     shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;

2.     derivative;

3.     units or any other instrument issued by any collective investment scheme to the investors in such schemes;

4.     security receipt as defined in clause (zg) of section 2 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

5.     units or any other such instrument issued to the investors under any mutual fund scheme;

6.     any certificate or instrument (by whatever name called), issued to an investor by any issuer being a special purpose distinct entity which possesses any debt or receivable, including mortgage debt, assigned to such entity, and acknowledging beneficial interest of such investor in such debt or receivable, including mortgage debt, as the case may be;

7.     Government securities;

8.     such other instruments as may be declared by the Central Government to be securities; and

9.     rights or interest in securities;

It is pertinent herein to note that all of the above instruments have an underlying capital asset. However there is no underlying asset in relation to CryptoCurrencies or Virtual Currencies. Accordingly CryptoCurrencies or Virtual Currencies do not fall under the definition of the securities, as mentioned above. 

By

Siddharth Dalmia, B.Tech.(DAIICT)

Email:dalmiasiddharth1994@gmail.com