ORDER UNDER SECTION 8 OF SECURITIES

CONTRACTS (REGULATION) ACT, 1956

The Hon’ble Finance Minister had announced in the Parliament on 13.3.2001 that "corporatisation of stock exchanges by which ownership, management, and trading membership would be segregated from each other. Administrative steps will be taken and legislative changes, if required, will be proposed accordingly." In accordance with the above policy announcement, SEBI had discussed the issue of demutualisation with the stock exchanges from time to time.

SEBI Board, in its meeting dated 28.12.2001 had decided that no broker member of the stock exchanges shall be an office bearer of an exchange i.e. hold the position of President, Vice President, Treasurer etc. This requires amendments to the Rules, Articles etc. of the stock exchanges.

Therefore, in exercise of the powers under Section 8 of Securities Contracts (Regulation) Act, 1956 read with Section 4(3) of Securities and Exchange Board of India Act, 1992, I hereby direct all the recognised stock exchanges to suitably amend its Rules, Articles etc. within a period of two months from the date of this order, to give effect to the decision taken by SEBI Board and the policy decision of Government in this regard.

If any of the stock exchanges fails or neglects to comply with this order within the period specified, SEBI may make the Rules / amend the rules of the concerned stock exchanges in accordance with the provisions of the said Section 8.

This direction shall come into force immediately.