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    Question

    Under Section 2(ac) of the Securities Contracts

    (Regulation) Act, 1956, which of the following is EXCLUDED from the definition of "Derivatives"?
    A A security derived from a debt instrument, share, loan, whether secured or unsecured. Correct Answer Incorrect Answer
    B A contract which derives its value from the prices, or index of prices, of underlying securities. Correct Answer Incorrect Answer
    C Commodity derivatives. Correct Answer Incorrect Answer
    D Any contract for the delivery of goods where delivery is taken within 11 days. Correct Answer Incorrect Answer
    E Such other instruments as may be declared by the Central Government to be derivatives. Correct Answer Incorrect Answer

    Solution

    Answer: D. Any contract for the delivery of goods where delivery is taken within 11 days. A contract for the actual delivery of goods (spot delivery or ready delivery contracts) is distinct from a derivative contract. Derivatives are financial contracts whose value is derived from an underly2ing asset, and they are often settled by offsetting positions rather than physical delivery (though physical delivery3 is possible in some commodity derivatives). The specific exclusion of "delivery within 11 days" is not part of the definition of a derivative but rather relates to the definition of a "Spot Delivery Contract" (Section 2(i)), which serves a different purpose in the Act. 3. Key Concept: The SCRA governs contracts in securities. Derivatives are treated as securities. Pure trade contracts for goods (spot delivery) are generally outside the purview of "derivatives" trading unless they are specific commodity derivatives regulated under the Act. Summary Table: Section 2(ac) Includes

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