THE GAZETTE OF
EXTRAORDINARY
PART –II – SECTION 3 – SUB SECTION (ii)
PUBLISHED BY AUTHORITY
SECURITIES AND EXCHANGE BOARD OF
NOTIFICATION
Mumbai, the ___day of September, 2003
SECURITIES AND EXCHANGE BOARD OF
(STOCK BROKERS AND SUB- BROKERS) (AMENDMENT)
REGULATIONS, 2003
S.O. No. ______(E).
In exercise of the powers conferred by section 30 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the
following regulations to amend the Securities
and Exchange Board of India (Stock Brokers And Sub-Brokers) Regulations, 1992,
namely:-
1. (i) These regulations may be
called the Securities and Exchange Board of India (Stock Brokers And Sub-Brokers) (Amendment) Regulations, 2003.
(ii) They
shall come into force on the date of their publication in the Official Gazette.
2. In
Securities and Exchange Board of
(i) In
regulation 11,
(a) in
sub-regulation (5), after clause (ii),
following sub-clauses shall be inserted, namely :-
“(iii) The applicant has the necessary
infrastructure like adequate office space,
equipment and manpower to effectively discharge his activities.”
(iv) The applicant shall be a person recognized
by the stock exchange as a sub-broker affiliated to a member broker of the
stock exchange.
(b) For the existing
sub-regulation (6), the following sub-regulation shall be substituted, namely :
-
“(6) The
stock exchange shall forward the application in Form ‘B’ of such applicant alongwith
the recommendation letter in Form ‘C’
issued by the stock broker with whom he is affiliated and also the
recognition letter in Form ‘CA’ issued by the stock exchange to the Board
within 30 days from the date of the receipt of the application”.
(ii)
In
regulation 15,
(a)
in
sub-regulation (1), after clause (c), the following clauses shall be inserted,
namely : -
“(d) comply
with the rules, regulations and bye-laws of the
stock exchange.
(e) not
be affiliated to more than one stock broker of one stock exchange.”
(b).In sub-regulation
(2), after the words “clauses (h), (i), (j)”, the word and bracket “(k)” shall
be omitted.
(iii) After regulation
15, the following regulation shall be inserted, namely :-
“15A Director
not to act as sub-broker
No director of a stock broker shall
act as a sub broker to the same stock broker.”
(iv)
In
regulation 17, in sub-regulation (1),
(a) the existing clause (g) shall be
substituted with the following, namely :-
“(g) Documents register containing, inter-alia,
particulars of securities received and delivered in physical form and the
statement of account and other records relating to receipt and delivery of
securities provided by the depository participants in respect of dematerialized
securities. “
(b). after clause (m), the following clause (n)
shall be inserted, namely :-
“(n) An agreement with the sub-broker and with
the client of the sub-broker to establish privity of contract between the stock
broker and the client of the sub-broker”.
(v)
After
regulation 18A, the following shall be inserted, namely :-
“ 18B Stock
Broker not to deal with unregistered sub-broker.
The stock broker shall
not deal with any person as a sub-
broker unless such person has been
granted certificate of registration by the Board under sub-regulation (1) of
Regulation 12.”
(vi)
In
Schedule I,
(a) in Form ‘B’, after the words “This is to
certify that __________ is a” and before the words “sub-broker affiliated to
________ member broker of this exchange.”, the word “recognized” shall be inserted.
(b) after Form ‘C’, the following Form ‘CA’
shall be inserted, namely : -
“FORM CA
Securities and Exchange Board of
Recognition letter to be issued by
the Stock Exchange
To,
The Securities and Exchange Board of
___________________________
___________________________
Mumbai.
Dear Sir,
This is to certify that ___________
has been recognized as a sub-broker by this Exchange being a sub-broker affiliated
to member broker ___________ of this Exchange.
Place : Authorized Signatory
Date : For and on behalf of ___________Exchange”
(vii) In Schedule
II,
(a) Under
the head “Code of Conduct for Stock-Brokers”,
(i) in clause (B), in sub-clause (2), after the
words “his client”, and before the words “a contract note”, the following words
“or client of the sub-broker, as the case may be” shall be inserted.
(ii) After
clause (C) a new clause (D) shall be inserted as under:-
“D. (1) A stock broker shall enter into an
agreement as specified by the Board with his client.
(2) A stock broker shall also enter into an
agreement as specified by the Board with the client of the sub – broker.
(b) Under the head “Code of Conduct for Sub-Brokers”, in clause (B), in sub-clause (1), the following words shall be omitted, namely :-
“and make payment in respect of
securities sold and arrange for prompt delivery of securities purchased by
clients”.
(c). In
clause (B), the existing entire sub-clause (2) shall
be substituted with the following, namely : -
“(2) A
sub-broker shall render necessary assistance to his client in obtaining the
contract note from the stock broker”.
(d) In
clause (B), in sub-clause (6), the following words shall be omitted, namely :-
“
and shall issue appropriate purchase / sale note”.
(e) In
clause (C), the existing sub-clause (4) shall be substituted with the
following, namely : -
“(4) Agreement
between sub-broker, client of the sub-broker and main broker : A sub-broker shall enter into a tripartite
agreement with his client and with the main stock broker specifying the scope
of rights and obligations of the stock broker, sub-broker and such client of the sub-broker.”
[F. No. SEBI/LE/ /2003]
GYANENDRA NATH BAJPAI
CHAIRMAN
SECURITIES AND EXCHANGE BOARD OF
Footnote:
- Securities
and Exchange Board of India (Stock Brokers And Sub-Brokers) Regulations,
1992, the principal Regulations, was published in the Gazette of India on
October 23, 1992 vide GSR No. 780 (E).
- It was subsequently amended on
:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)