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Circular No. FITTC/CUST/ 5 /1999
February 12, 1999

To all Registered Custodians of Securities

Dear Sir/Madam,

As per Second Schedule of SEBI (Custodian of Securities) Regulations 1996, all registered custodians are required to pay an annual fee of Rs.5,00,000 (Rupees five lakhs only). This fee is to be paid for each twelve month period commencing from the day of registration of the custodian. It has been decided that this fee shall henceforth be paid within one month of beginning of the twelve month period from the date of registration or the subsequent annual period. It shall be the responsibility of the custodian to pay the fee within the specified time.

All existing custodians holding certificate of registration are advised to pay the annual fee for the current period by March 15, 1999 and subsequently in the manner prescribed above.

In terms of regulation 6 (1) (a) read with regulation 7 of SEBI (Custodian of Securities) Regulations, 1996, all custodians are required to fulfill the capital requirements by having a net worth of Rs.50 crores. In order to monitor the fulfillment of capital requirements, all custodians are advised to submit a certified copy of their audited annual accounts / annual report along with a networth certificate signed by a practicing chartered accountant within six months of close of each financial year.

All custodians are advised to ensure compliance with the instructions contained herein above. Non-compliance would be viewed seriously and may result in disciplinary action against the custodian.

Yours faithfully,