All Recognized
Stock Exchanges and Clearing Corporations
CIRCULAR,
CIR/MIRSD/8/2013, dated September 30, 2013
1. Please find enclosed
the Notification No. LAD-NRO/GN/2013-14/25/24775 dated September 27, 2013 amending
the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter
referred to as Broker Regulations). As per the amendment, the existing practice
of obtaining multiple registrations for operating in different segments of a stock
exchange / clearing corporation has been done away with and instead a single
registration per stock exchange / clearing corporation shall be required. For
operating in multiple segments, approval will be required from the stock
exchange or clearing corporation.
2. For the purpose of
implementing the revised registration requirements, the following guidelines
are being issued:
a. If a new entity intends to register as a stock broker or
clearing member in any segment(s) of a stock exchange or a clearing corporation
promoted by that stock exchange, then the entity shall apply to SEBI through
the respective stock exchange or clearing corporation in the manner prescribed
in the Broker Regulations in any one segment. The entity shall be issued a
certificate with a unique registration number for each stock exchange or Clearing
Corporation, as the case may be, irrespective of number of segments.
b. If an entity is already registered with SEBI in any segment of
the stock exchange, then for operating in any other segment of that stock
exchange or for operating in the clearing corporation promoted by that stock
exchange, the entity need not apply to SEBI. The entity can directly apply to
the concerned stock exchange or clearing corporation as per the procedure prescribed
in the Broker Regulations for approval.
c. Similarly, if any entity is already registered with SEBI in any
segment of the clearing corporation, then for operating in any other segment of
the clearing corporation or for operating in the stock exchange which has
promoted that clearing corporation, the entity shall follow the procedure as
prescribed in Clause 2b above.
d. Fees shall be applicable for all the stock brokers, self clearing
members and clearing members as per Schedule V of the Broker Regulations. As
per current practice, the entity shall continue to be liable to pay fees for
each additional segment approved by the stock exchange or clearing corporation,
as per the Schedule to the Brokers Regulations. For stock brokers coming under Schedule
III, fees shall continue to be applicable as per that Schedule till such time
as the Schedule V becomes applicable to them.
3. The stock exchange or clearing
corporation shall grant approval for any additional segment to the stock
broker, self-clearing member or clearing member, as the case may be, after
exercising due diligence and on being satisfied about the compliance of all
relevant eligibility requirements, and shall also ensure:
a. The applicant,
its directors, proprietor, partners and associates satisfy the Fit and Proper
Criteria as defined in the SEBI (Intermediaries) Regulations, 2008 and whether
any past actions taken / initiated against them by SEBI / stock exchange(s) or
other regulators.
b. The stock
exchange or clearing corporation shall satisfy itself that the applicant has taken
corrective steps to rectify the deficiencies or irregularities observed in the past.
They may also seek details whether the Board of the applicant is satisfied about
the steps taken. They may also carry out inspection, wherever considered appropriate.
c. Recover all
pending fees / dues payable to SEBI and / or stock exchange.
4. The Stock Exchanges and Clearing
Corporations are directed to –
a. bring the
provisions of this circular to the notice of the Stock Brokers, Self Clearing members
and Clearing members as the case may be, and also disseminate the same on their
websites;
b. make necessary
amendments to the relevant bye-laws, rules and regulations for the
implementation of the above decision in co-ordination with one another; and
c. communicate to
SEBI, the status of the implementation of the provisions of this circular
through Monthly Development Report of the following month.
5. This circular is issued in exercise of
powers conferred under Section 11(1) of the Securities and Exchange Board of
India Act, 1992 and Regulation 29 & 30 of the SEBI (Stock Brokers and
Sub-Brokers) Regulations, 1992 to protect the interests of investors in
securities and to promote the development of, and to regulate the securities
markets.
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