MISCELLANEOUSCentral

Section 17 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002

Notwithstanding anything contained in any other law for the time being in force, the shares, bonds, debentures and units of the specified undertaking shall be deemed to be approved securities for the purposes of the Indian Trusts Act, 1882 (2 of 1882), the Insurance Act, 1938 (4 of 1938) 1***.

Summary

Shares, bonds, debentures, and units belonging to the specified undertaking get a special legal status.
They are officially considered approved securities.
This special status applies specifically for the rules found in the Indian Trusts Act, 1882.
It also applies for the purposes of the Insurance Act, 1938.
This applies regardless of what any other law might say.

Practical examples

1An insurance company is checking if its portfolio meets the legal safety standards in 2005. Because the bonds from the specified undertaking are deemed approved securities under this law, the insurance company can legally count them towards their mandatory safe investments under the Insurance Act, 1938.

2A family trust from Delhi needs to invest 500,000 rupees in safe assets as required by the Indian Trusts Act, 1882. The trustee can confidently buy units of the specified undertaking, knowing this law officially stamps them as approved.

FAQ

1. Are the units of the specified undertaking considered safe legal investments for trusts?

Yes, they are officially deemed approved securities for the purposes of the Indian Trusts Act, 1882.

2. Does this rule affect insurance companies?

Yes, these financial items are also considered approved securities for the purposes of the Insurance Act, 1938.

3. What financial instruments get this special status?

The special status covers shares, bonds, debentures, and units of the specified undertaking.

Test yourself

Q1.Under Section 17 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, what legal status is given to the shares and bonds of the specified undertaking?

Q2.Under Section 17 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, for the purposes of which Act are these units considered approved securities?

Q3.Under Section 17 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, which other law, besides the Indian Trusts Act, 1882, is explicitly mentioned regarding approved securities?

Q4.Under Section 17 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, which financial instrument is NOT explicitly listed in the text of this provision?

Q5.Under Section 17 of The Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, what happens if another law conflicts and says these units are not approved securities?

16PreviousSection 16 Protection of action taken in good faith.18NextSection 18 Substitution in every Act, rule, regulation or notification by specified company or Administrator in place of Trust.

←Section 16 Section 18→