KVSSNRao's Handbook of Management of Securities Market Intermediaries: October 2007

Tuesday, October 30, 2007

Rabo India Finance splits Investment banking JULY 2006

economic times 11th July 2006

RIF split its investment banking business into two verticals - capital markets for raising resources; and mergers and acquisitions and corporate advisory cell.

RIF has taken in kaushik Modak as ED and head-capital markets. RAhul Chander and Jayen Shah are directors.

The M&a cell will be headed by Shefali shah. She was earlier head of the Indian operations of Insite Equity.

CEO and Md of RIF is Sanjiv Bhasin.

The earlier head of Inv banking left to start IB at Motilal Oswal.

Now the capital markets team has 8 persons and M&A team has five persons.

The non fund income of the RIF is expected to go up from 10% to 40%.

RIF is also looking at adding on research to its existing operations.
Mr Bhasin added that they are looking at adding distribution network also in India.

Risk in Underwriting

Merchant bankers have to sheel out Rs 300 Cr to rescue Cairn IPO

Economic Times 3 Jan 2007

The retail portion was subscribed 0.67 times.
The HNI category fared worse at 0.36 times.

the balance was subscribed by the merchant bankers of the issue, Merrill Lynch, Morgan Stanley and ABn rothschild

Sunday, October 28, 2007

Meghraj Financial Services (India) Private Limited - Investment Bank

www.meghraj.com

The firm is a member of the UK-headquartered Meghraj group.
It is a SEBI registered Category I Merchant Banking firm in India.
Meghraj group has a presence in UK, Jersey, Switzerlandl, Liechtenstein, Mauritius, Japan and India providing private banking and financial services.

Meghraj India is also the exclusive Indian member of Global M&A the world's leading network of independent M&A firms across 25 countries.

Advertisement on 3rd March 2005 in ET. The advertisement gives an idea of organization structure.

Positions advertised: Assistant V.P., Sr. Associate, Associate

Debt Restructuring Group

DRG offers comprehensive restructuring under CDR, Steering Committee, BIFR etc. and refinancing of stressed debt and debt swaps for cost reduction,. Members of DRG have successfully resolvedf/arranged funds of more than INR 40 billion.

Structured Finance Group

SFG is into Securitization of mortgaged backed products, CDOs, CLOs and future flows. SFG also handles Guaranteed Structures, fixed income securities, Derivatives and Mezzanine Finance.

Infrastructure and Project Finance Group

IFG handles Infrstructure and project finace, syndication of Forex and Rupee Term loans, and working capital and placement of private equity.

Strategic Advisory and M&A Group

SAMA offers business restructuring, domestic and international M&A, Partner search and Private Equity syndication.

Research and Consultancy Group

RCG offers research support to in-house business groups and undertakes project consultancy

Meghraj India has Ahmedabad Regional Office, that offers full services to Gujarat and the northwestern part of India.

Email: careers@meghrajindia.com
fax (022) 24931765

Meghraj Financial Services (India) Private Limited
3rd floor, Khanna Construction House, 44, Dr.R.G.Thadani Marg, Worli, Mumbai - 400 018, Tel: (022) 2493 1764

Mode details from http://www.meghraj.com/meghraj_india_services.asp

Above site was accessed on 29-10-2007

Services offered

Strategic Advisory
and M&A

Cross-border transactions
Strategic and financial partner searches
Domestic
Cross-border
Brand acquisitions and disposals
Business restructuring
Venture capital

Private Equity

Fundraising for corporates
Disposal of portfolio companies for private equity funds

Research & Consultancy

Support services:
M&A
Bidding
Evaluations
Business analyses
Project feasibility studies
Sector analyses and studies

Debt Restructuring

Stressed account resolution through CDR, ARC, BIFR etc.
OTS and negotiated time settlements
Turnaround asset financing
Business plan preparation and validation

Infrastructure & Project Finance

Project structuring
Project financing
Capital raising
Domestic
International

Structured Finance

Securitisation
On- and off-balance sheet solutions
Credit enhancements
Risk management
Fixed income securities

Debt Syndication

Rupee term loans
Working capital finance
Foreign currency loans and ECBs

Capital Markets Advisory

Issue management and equity placements
Open offers
Buy-back of securities
Delisting of securities

The details of transactions done by Meghraj India are available in the site for each of the services.

Mutual Fund Marketing Associate New York Oct 2007

Mutual Fund Marketing Associate

Location: New York , NY
ZIP/Postal Code: 10019
Listed: Thursday, October 18, 2007 4:42 PM
Expires: Sunday, November 11, 2007 1:30 PM
Category: Marketing/PR

Description:
Assist in the creation of materials and completion of marketing-related projects supporting the firm’s mutual fund marketing efforts.

• Creating brochures, sales ideas, fact sheets, and other mutual fund marketing materials

• Develop and coordinate mutual fund marketing focus programs/campaigns

• Conduct competitive research

• Develop a system to gather quantitative and qualitative research on literature perceptions and usage

• Complete writing projects such as articles for external publication, emails, letters etc.

Requirements:
Superb organizational skills
Ability to coordinate projects involving multiple parties within the firm including design team, legal/compliance, product management, portfolio management, sales and others.

Candidate must also have thorough knowledge of Mutual Fund products and minimum 1 year experience in a mutual funds marketing role.

4 year degree from an accredited academic institution.

SEE for details http://expo.live.com/ViewListing.aspx?lId=7413297&pid=msn_careers&s_cid=msn_careers

Career Opporutunites - SBI Mutual Fund - October 2007

Why SBI Mutual Fund?

SBI Mutual Fund is one of the fastest growing mutual fund houses in India having launched 40 schemes with over Rs.20000 Crores as assets under management. We are currently experiencing growth in many areas with our investor base of over 3.5 million across India, a large network of over 100 points of acceptance, 26 Investor Service Centres, 33 Investor Service Desks and 52 District Organizers.

To build your future with us email your resume to hrd@sbimf.com or send your resume addressed to HR Manager, Corporate Office, SBI Funds Management Pvt. Ltd. 191, Maker Tower 'E', Cuffe Parade, Mumbai-400 005.

Current openings

Relationship Manager
Assistant Relationship Manager
Assistant Manager – IT (Software Development)
Senior Relationship Manager – Institutional Sales
Senior Manager – Customer Service
Head – Investor Service Centre

Relationship Manager
Location : Mumbai, Delhi, Jaipur, Ajmer

Responsibilities :
- Acquiring new Corporate clients
- Servicing the existing clients
- Increasing the Institutional Business
- Achieving the Targets set

Education & Experience :
- Preferably MBA with Sales Orientation
- Preferably 2-3 years of Mutual Fund Industry experience in the Institutional segment
- Good Communication/Presentation skills with a high degree of integrity is a must

Assistant Relationship Manager
Location : ISC-Goa, Meerut, Ajmer, Allahabad, Varanasi

Responsibilities :
- To Plan and strategize for marketing of SBIMF products
- Ensure mobilization of funds to the schemes as budgeted from time to time
- Maintaining and developing relationship with key investors and other market participants
- Building SBIMF distribution network and ensuring optimal performances of distribution systems and network in the territory.

Education & Experience :
- Preferably an MBA (Sales/ Marketing).
- Relevant experience of 2 to 3 years in Financial Marketing

Skill Required :
- Fluency in English, excellent presentation & marketing skills.
- Strong analytical skills
- Capacity to quickly understand financial markets / mutual fund industry / our schemes & sales orientation.
- Self Starter

Assistant Manager – IT (Software Development)
Location: Mumbai

Responsibilities:
- Managing and developing software applications
- Maintenance and development of systems appropriate for user specific needs

Education & Experience:
- Graduation, Relevant Certification from reputed Institute
- Relevant experience of 1 to 2 years, preferably in Financial Market

Skill Required :
- Fluency in English
- Excellent Analytical skills
- Knowledge about Dot Net and Oracle
- Knowledge of Data Base Management

Senior Relationship Manager – Institutional Sales
Location : Kolkata

Responsibilities :
- To Plan and strategize for marketing of SBIMF products
- Ensure mobilization of funds to the schemes as budgeted from time to time
- Maintaining, retaining and developing key investors and other market relationships.
- Building SBIMF distribution network and ensuring optimal performances of distribution systems and network in the territory.

Education & Experience :
- Preferably an MBA (Sales/ Marketing).
- Relevant experience of 3 to 5 years preference in Institutional Marketing

Skill Required :
- Fluency in English, excellent presentation & marketing skills.
- Strong analytical skills
- Capacity to quickly understand financial markets / mutual fund industry / our schemes & sales orientation.
- Self Starter

Senior Manager – Customer Service
Location : Kolkata

Responsibilities :
- Co-ordinating with R&T agents
- Handle all customer queries /Grievance of the region.
- Liaise with CAMS ISCs in the area and their back office for resolving customer grievance
- Recommend ways to improve quality of customer service

Skill Required :
- Fluency in English.
- Leadership skills.
- Excellent presentation & communication skills
- Capacity to understand Mutual Fund Industry, procedures and our scheme features.
- Self Starter
Education & Experience :
- Commerce Graduate
- Post Graduate Degree in Management would be an added advantage
- Relevant experience of 3 to 5 years

Head – Investor Service Centre
Location : Vadodara

Responsibilities :
Heading the Investor Service Centre
-To Plan and strategize for marketing of SBIMF products in the territory
- Ensure mobilization of funds to the schemes as budgeted from time to time
- Maintaining, retaining and developing key investors and other market relationships.
- Building SBIMF distribution network and ensuring optimal performances of distribution systems and network in the territory.
Enhancing the image of Customer Services

Skill Required :
- Fluency in English, excellent presentation & marketing skills.
- Strong analytical and leadership skills
Education & Experience :
- Preferably an MBA (Sales/ Marketing).
- Relevant experience of 5 to 8 year in Sales and marketing of Financial Products, preferably minimum 3 years in marketing of Mutual Funds.

http://www.sbimf.com/careers.asp

White papers on IT Issues from BIT pipe - Securities Industry

http://www.bitpipe.com/tlist/Securities-Industry.html

Securities Industry

ALSO CALLED: Equity Trading, Security and Commodity Brokers, Stock Market, Security Brokers, Financial Securities Industry, Commodity Brokers, Mutual Fund Industry, Futures Trading, Commodity Investing Industry, and Brokerage Houses
DEFINITION: Establishments in this group are primarily engaged in one of the following: underwriting securities issues and/or making markets for securities and commodities; acting as agents (i.e., brokers) between buyers and sellers of securities and commodities; providing security and commodities exchange services; and providing other services, such as managing portfolios of assets; providing investment advice; Establishments in this group are primarily engaged in one of the following: underwriting securities issues and/or making markets for securities and commodities; acting as agents (i.e., brokers) between buyers and sellers of securities and commodities; providing security and commodities exchange services; and providing other services, such as managing portfolios of assets; providing investment advice; and trust, fiduciary, and custody services.

1. Optimize Customer Interactions to Drive New Revenue
sponsored by Portrait Software

SUMMARY: Learn more about the trends in your marketplace and how financial organizations are leveraging customer information to generate new revenue opportunities.

2. Paving the Way for Business Innovation with Integrated Business Communications
sponsored by IBM Software Group

SUMMARY: This paper provides an overview of opportunities and benefits and includes two "before and after" scenarios -- one in financial services and one in healthcare -- that demonstrate how IBM clients have benefited from integrated business communications.

3. BlackBerry for Investments: Handheld Device Trends in the US Retail Brokerage Advisory Industry
sponsored by BlackBerry

SUMMARY: This whitepaper examines the usage of wireless handheld devices within the US Retail Brokerage industry with a focus on financial advisors

4. Ping: Mark Odiorne
sponsored by Information Security Magazine

SUMMARY: Sarbanes-Oxley is probably the biggest focus; Gramm-Leach-Bliley as well, because we're a financial services company.

5. Bitpipe Industry Guide: Financial Services Industry
sponsored by Bitpipe

SUMMARY: The Financial Services Industry pervades the entire IT industry. This guide gets you up to speed on essential financial areas such as Regulatory Compliance, Business Continuity, Financial Reporting, and Financial Management.

…

Interesting web sites for Management - Mutual Funds, Investment Banks

http://www.mfmarketnews.com/

Best Mutual Fund Website Award - 2007

Best Mutual Fund Websites

Each year the Web Marketing Association names the Best Mutual Fund web site as part of the annual WebAward Competition.

Here is your chance to stand out from your competitors and win the recognition you deserve while receiving valuable independent feedback on your development efforts.

Best websites are selected by judges who review the entered websites using the seven criteria below:

Design

Ease of use

Copywriting

Interactivity

Use of technology

Innovation

Content

The 2007 winners have been announced. As a participant next year, you will receive:

An independent evaluation of your Mutual Fund Website

Valuable feedback to help Benchmark your efforts

If your site wins a Mutual Fund WebAward, you will also get:

A beautiful image plaque or certificate of achievement to display proudly

Higher visibility for your company

A great marketing opportunity to promote your site to the media

Links to your site from the highly ranked WebAward site to help SEO

The admiration of peers, friends and co-workers – maybe even a raise!

Each year the Web Marketing Association's WebAward Competition names the Best Mutual Fund web site. Best websites are selected by judging the entered websites using seven criteria - design, ease of use, copywriting, interactivity, use of technology, innovation and content. Websites not selected as best Mutual Fund website are also eligible for an Outstanding Website Award or a Standard of Excellence Award.

The 2007 WebAward competition has ended. Please add your name to our mailing list to be notified when award winners are announced.

Here are the past Best Mutual Fund WebAward winners:

Year--------- Winner---------- Site Name
2007--- John Hancock Funds, LLC- John Hancock Funds Financial Professional Website
2006--- Cohen & Steers---------- Cohen & Steers Website
2005--- Cohen & Steers---------- Cohen & Steers Website
2004--- bbdigitalBlattner Brunner)- HighMark Funds Website
2003--- Barclays Global Investors--iShares.com

http://www.webaward.org/winners_detail.asp?yr=all&award_level=best&category=Mutual%20Fund

Thursday, October 18, 2007

SEBI Stock Broker Regulations Part-4 Code of Conduct

SECURITIES AND EXCHANGE BOARD OF INDIA
(STOCK BROKERS & SUB-BROKERS) Regulations, 1992
CODE OF CONDUCT FOR SUB-BROKERS
(Regulation 15)
A. GENERAL
(1) INTEGRITY: A sub-broker, shall maintain high standards of integrity, promptitude
and fairness in the conduct of all investment business.
(2) EXERCISE OF DUE SKILL AND CARE: A sub-broker, shall act with due skill, care
and diligence in the conduct of all investment business.
B. DUTY TO THE INVESTOR
(1) EXECUTION OF ORDERS: A sub-broker, in his dealings with the clients and the
general investing public, shall faithfully execute the orders for buying and selling of
securities at the best available market price. A sub-broker shall promptly inform his client
about the execution or non-execution of an order 61[******]
62 [(2) A sub-broker shall render necessary assistance to his client in obtaining the
contract note from the stock broker]
(3) BREACH OF TRUST: A sub-broker shall not disclose or discuss with any other
person or make improper use of the details of personal investments and other information
of a confidential nature of the client which he comes to know in his business relationship.
(4) BUSINESS AND COMMISSION:
(a) A sub-broker shall not encourage sales or purchases of securities with the sole object
of generating brokerage or commission.
(b)A sub-broker shall not furnish false or misleading quotations or give any other false or
misleading advice or information to the clients with a view of inducing him to do
61 Words ‘and make payment in respect of securities sold and arrange for prompt delivery of securities
purchased by clients” inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations,
2003, w.e.f. 23-9-2003.
62 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2003, w.e.f. 23-9-
2003 for the words, “
(2) A. Issue of purchase or sale notes:
(a) A sub-broker shall issue promptly to his clients purchase or sale notes for all the transactions entered
into by him with his clients.
(b) A sub-broker shall issue promptly to his clients scrip wise split purchase or sale notes and similarly bills
and receipts showing the brokerage separately in respect of all transactions in the specified form.
(c) A sub-broker shall only split the contract notes client-wise and scrip wise originally issued to him by the
affiliated broker into different denominations.
(d) A sub-broker shall not match the purchase and sale orders of his clients and each such order must
invariably be routed through a member-broker of the stock exchange with whom he is affiliated.”
business in particular securities and enabling himself to earn brokerage or commission
thereby.
(c)A sub-broker shall not charge from his clients a commission exceeding one and onehalf
of one percent of the value mentioned in the respective sale or purchase notes.
(5) BUSINESS OF DEFAULTING CLIENTS: A sub-broker shall not deal or transact
business knowingly, directly or indirectly or execute an order for a client who has failed
to carry out his commitments in relation to securities and is in default with another broker
or sub-broker.
(6) FAIRNESS TO CLIENTS: A sub-broker, when dealing with a client, shall disclose
that he is acting as an agent 63[******] ensuring at the same time, that no conflict of
interest arises between him and the client. In the event of a conflict of interest, he shall
inform the client accordingly and shall not seek to gain a direct or indirect personal
advantage from the situation and shall not consider clients' interest inferior to his own.
(7) INVESTMENT ADVICE: A sub-broker shall not make a recommendation to any
client who might be expected to rely thereon to acquire, dispose of, retain any securities
unless he has reasonable grounds for believing that the recommendation is suitable for
such a client upon the basis of the facts, if disclosed by such a client as to his own
security holdings, financial situation and objectives of such investment. The sub-broker
should seek such information from clients, wherever they feel it is appropriate to do so.
64[7A – Investment Advice in publicly accessible media –
(a) A sub-broker or any of his employees shall not render, directly and indirectly any
investment advice about any security in the publicly accessible media, whether real –
time or non real-time, unless a disclosure of his interest including his long or short
position in the said security has been made, while rendering such advice.
(b) In case, an employee of the sub-broker is rendering such advice, he shall also disclose
the interest of his dependent family members and the employer including their long or
short position in the said security, while rendering such advice.]
(8) COMPETENCE OF SUB-BROKER: A sub-broker should have adequately trained
staff and arrangements to render fair, prompt and competent services to his clients and
continuous compliance with the regulatory system.
63 Words, ‘and shall issue appropriate purchase / sale note” omitted by the SEBI (Stock Brokers and Subbrokers)
(Amendment) Regulations, 2003, w.e.f. 23-9-2003.
64 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2003, w.e.f. 29-5-
2001.
C. SUB-BROKERS VIS-A-VIS STOCK BROKERS
(1) CONDUCT OF DEALINGS: A sub-broker shall co-operate with his broker in
comparing unmatched transactions. Sub-broker shall not knowingly and willfully deliver
documents which constitute bad delivery. A sub-broker shall co-operate with other
contracting party for prompt replacement of documents which are declared as bad
delivery.
(2) PROTECTION OF CLIENTS INTERESTS: A sub-broker shall extend fullest cooperation
to his stock-broker in protecting the interests of their clients regarding their
rights to dividends, right or bonus shares or any other rights relatable to such securities.
(3) TRANSACTIONS WITH BROKERS: A sub-broker shall not fail to carry out his
stock broking transactions with his broker nor shall he fail to meet his business liabilities
or show negligence in completing the settlement of transactions with them.
65[(4) Agreement between sub-broker, client of the sub-broker and main broker: A subbroker
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]
(5) ADVERTISEMENT AND PUBLICITY: A sub-broker shall not advertise his
business publicly unless permitted by the stock exchange.
(6) INDUCEMENT OF CLIENTS: A sub-broker shall not resort to unfair means of
inducing clients from other brokers.
D. SUB-BROKERS VIS-A-VIS REGULATORY AUTHORITIES.
(1) GENERAL CONDUCT: A sub-broker shall not indulge in dishonourable, disgraceful
or disorderly or improper conduct on the stock exchange nor shall he wilfully obstruct the
business of the stock exchange. He shall comply with the rules, bye-laws and regulations
of the stock exchange.
(2) FAILURE TO GIVE INFORMATION: A sub-broker shall not neglect or fail or
refuse to submit to the Board or the stock exchange with which he is registered, such
books, special returns, correspondence, documents, and papers or any part thereof as may
be required.
(3) FALSE OR MISLEADING RETURNS: A sub-broker shall not neglect or fail or
refuse to submit the required returns and not make any false or misleading statement on
any returns required to be submitted to the Board or the stock exchanges.
65 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2003, w.e.f. 23-9-
2003.
(4) MANIPULATION: A sub-broker shall not indulge in manipulative, fraudulent or
deceptive transactions or schemes or spread rumours with a view to distorting market
equilibrium or making personal gains.
(5) MALPRACTICES : A sub-broker shall not create false market either singly or in
concert with others or indulge in any act detrimental to the public interest or which leads
to interference with the fair and smooth functions of the market mechanism of the stock
exchanges. A sub-broker shall not involve himself in excessive speculative business in
the market beyond reasonable levels not commensurate with his financial soundness.
SCHEDULE III
SECURITIES AND EXCHANGE BOARD OF INDIA
(Stock Brokers And Sub-Brokers) Regulations, 1992
(Regulation 10)
I. FEES TO BE PAID BY THE STOCK-BROKER
1. Every stock-broker shall subject to paragraphs 2 and 3 of this Schedule pay registration
fees in the manner set out below:
(a) Where the annual turnover does not exceed rupees one crore during any financial
year, a sum of rupees five thousand for each financial year or;
(b) Where the annual turnover of the stock-broker exceeds rupees one crore during any
financial year, a sum of rupees five thousand plus one hundredth of one percent of the
turnover in excess of rupees one crore for each financial year;
66 [(bb) Notwithstanding anything contained in clause (b) it is clarified that the fee shall
be recoverable as computed as under:
(i) in respect of jobbing transactions that is to say all transactions which are squared off
during the same day which have not been undertaken by the broker on behalf of clients,
the fees shall be computed at the rate of one two hundredth of one percent in respect of
the sale side of such transactions;
(ii) in respect of transactions in Government securities, the bonds issued by any Public
Sector Undertaking and the units traded in a similar manner, the fee payable shall be
computed at the rate of one thousandth of one percent of the turnover;
66 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2002, w.e.f. 20-2-
2002.
(iii) in case of carry forward, renewal or badla transactions the fees shall be computed at
the rate of one hundredth of one percent of the turnover and the reverse off setting
transactions shall not be counted as part of the turnover.
(iv) if brokers are carrying out transactions in securities without reporting them to the
stock exchange, those transactions shall be taken into account for the purpose of turnover
and the fees shall be computed at the rate of one hundredth of one percent of the
turnover;
(v) the trade put through on other stock exchanges shall be included in the turnover of
that exchange if market for that security does not exist on the exchange of which he is a
member and the fees shall be computed at the rate of one hundredth of one percent of the
turnover;
(vi) activity such as underwriting and collection of deposits shall not be taken into
account for the purpose of calculating the turnover’.]
(c) After the expiry of five financial years from the date of initial registration as a stockbroker,
he shall pay a sum of rupees five thousand for 67[every] block of five financial
years commencing from the sixth financial year after the date of grant of initial
registration to keep his registration in force.
2. Fees referred to in clause (a) and (b) of paragraph 1 above shall be paid -
(a) in respect of the financial year 1992-1993 within one month of the commencement of
these regulations;
(b) in respect of the financial year beginning on the 1st day of April, 1993 and the
following financial years, on or before the first day of October of the financial year to
which such payment relates,
and such fees shall be computed with reference to the annual turnover relating to the
preceding financial year.
3. Every remittance of fees referred to in clauses (a) and (b) of paragraph 1, shall be
accompanied by a certificate as to the authenticity of turnover on the basis of which fees
have been computed duly signed by the stock exchange of which the stock-broker is a
member or by a qualified auditor as defined in Section 226 of the Companies Act, 1956.
Explanation - For the purposes of paragraphs 1, 2 and 3 "annual turnover" means the
aggregate of the sale and purchase prices of securities received and receivable by the
67 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2002, w.e.f. 20-2-
2002.
stock broker either on his own account as well as on account of his clients in respect of
sale and purchase or dealing in securities during any financial year.
68[4. Where a corporate entity has been formed by converting the individual or
partnership membership card of the exchange, such corporate entity shall be exempted
from payment of fee for the period for which the erstwhile individual or partnership
member, as the case may be, has already paid the fees subject to the condition that the
erstwhile individual or partner shall be the wholetime Director of the corporate member
so converted and such Director will continue to hold minimum 40% shares of the paid-up
equity capital of the corporate entity for a period of at least three years from the date of
such conversion]
69[“Explanation: It is clarified that the conversion of individual or partnership
membership card of the exchange into corporate entity shall be deemed to be in
continuation of the old entity and no fee shall be collected again from the converted
corporate entity for the period for which the erstwhile entity has paid the fee as per the
regulations”].
70[4A. Where a stock exchange has formed a subsidiary company, which has become a
stock broker of another stock exchange, then the turnover of the stock broker who is
buying, selling or dealing in securities, through the subsidiary company as a sub-broker,
shall be excluded from the turnover of the subsidiary company, only if the stock broker
has paid five years turnover based fees plus fee for a block of five years in accordance
with the regulations, on the concerned stock exchange which has formed the subsidiary
company.]
71[5. If a stock broker fails to remit fees in accordance with paragraph 1 and 2, he shall be
liable to pay interest @ 15% per annum for each month of delay or part thereof;
Provided that the liability to pay interest as aforesaid may be addition to any other action
which the Board may take as deem fit against the stock broker under the Act, or the
Regulations;
Provided further that if the liability of the stock broker on account of payment of interest
works out to be Rs. 100 or less the same may be waived off by the Board taking into
consideration the administrative cost involved in recovering the said amount].
68 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Second Amendment) Regulations, 1998, w.e.f.
21-1-1998.
69 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 1998, w.e.f. 20-2-
2002.
70 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2000, w.e.f. 30-8-
2000.
71 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Third Amendment) Regulations, 1998, w.e.f. 16-
12-1998.
72[“II. Fees to be paid by sub-brokers
Every sub-broker shall pay fees in the manner set out below:
(a) Where a sub-broker was granted certificate of registration by the Board before
August 1, 2006 -
(i) he shall pay a sum of ten thousand rupees for the block of five financial
years commencing from April 1, 2007; and
(ii) after the expiry of the said block of five financial years, he shall pay a sum
of five thousand rupees for every subsequent block of five financial years.
(b) Where a sub-broker is granted certificate of registration by the Board on or
after August 1, 2006 -
(i) he shall pay a sum of ten thousand rupees for the block of five financial
years commencing from the financial year in which registration has been
granted; and
(ii) after the expiry of the said block of five financial years, he shall pay a
sum of five thousand rupees for every subsequent block of five financial
years.
(c) Every sub-broker shall pay fees under sub-clause (a) or sub-clause (b), as the
case may be, within such time as may be specified by the Board.”]
III. MANNER OF FEES TO BE PAID
73[The fees indicated above shall be paid on or before the 1st day of October each year
payable by draft in favour of the Securities and Exchange Board of India at Bombay or at
the respective regional office].
74[IV.Non-applicability to stock – brokers governed by Schedule IIIA.
The provisions of this schedule shall not apply to stock brokers to whom Schedule III-A
applies, from the time when it becomes so applicable.]
72 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Third Amendment) Regulations, 1998, w.e.f.
16-12-1998 for the words,
“II. FEES TO BE PAID BY SUB-BROKER:
(a) A Sub-broker shall pay a fee of rupees one thousand for each financial year for an initial
period of five years.
(b) After the expiry of the five years mentioned above, the sub-broker shall pay a fee of rupees
five hundred for each financial year as long as the Certificate remains in force.”
73 Substituted by the SEBI (Payment of Fees) (Amendment) Regulations, 1995, w.e.f. 28-11-1995 for the
words,
“The fees indicated above shall be paid on or before the 1st day of October each year
payable by a cheque or draft in favour of the Securities and Exchange Board of India" at
Bombay”
74 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Third Amendment) Regulations, 2006, w.e.f. 1-
10-2006.
75[“Schedule III-A
PAYMENT OF FEES BY STOCK BROKERS
[Regulation 10(1)]
Part A – Applicability
1. This schedule shall apply to stock brokers from the following points of time:
(a) All stock brokers who are granted registration by the Board on or after the first
day of October, 2006 – upon grant of such registration;
(b) All stock brokers who were granted registration by the Board on or after the first
day of April, 2006, but before the first day of October, 2006 – from the first day
of October, 2006;
(c) All stock brokers who have not completed five financial years from the date of
grant of registration by the Board, as on the thirty first day of March, 2006 – upon
completion of ten financial years from the date of grant of registration by the
Board;
(d) All stock brokers who have completed five financial years from the date of grant
of registration by the Board, as on the thirty first day of March, 2006 – upon
completion of the current block of five financial years, within the meaning of item
I(1)(c) of Schedule III;
(e) All stock brokers falling under sub-clauses (c) or (d), who opt in accordance with
clause 2 to be governed by the provisions of this Schedule – from such date as
may be specified by the Board.
2. Stock brokers falling under sub-clauses (c) or (d) of clause 1 may opt to pay fees in
accordance with this Schedule before completion of the relevant time periods mentioned
in those sub-clauses, by exercising an option in writing to that effect and communicating
it to the Board, in such manner and within such time as may be specified by the Board.
Part B – Charge of fees
3. On and from the applicability of this Schedule, every stock broker shall pay to the
Board in accordance with Part C, a fee in respect of the securities transactions including
off-market transactions undertaken by them, at the rates mentioned below:
Sl.
No.
Nature of the securities
transaction
Rate of fee
a. All sale and purchase
transactions in securities other
than debt securities.
0.0002 per cent. of the price at which
the securities are purchased or sold
(Rs.20/- per crore)
b. All sale and purchase
transactions in debt securities.
0.00005 per cent. of the price at which
the securities are purchased or sold
(Rs.5/- per crore)
75 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Third Amendment) Regulations, 2006, w.e.f. 1-
10-2006..
4. Nothing in clause 3 shall affect the liability of any stock broker to pay fees under
Schedule III, which accrued before this Schedule became applicable to him and such fees
shall be paid as per the relevant provisions of Schedule III as if they had not ceased to be
applicable to him.
Part C – Manner of payment and recovery
5. (1) Every recognised stock exchange shall collect from every stock broker to whom
this Schedule applies, the fee payable under clause 3 in respect of -
(a) securities transactions entered into by him in that stock exchange; and
(b) off-market transactions entered into by him which are reported to that stock
exchange –
in accordance with the provisions of its bye-laws.
Explanation: The Board may specify the manner in which fees shall be collected from
stock brokers who report the same transactions to different stock exchanges in which they
are members, under clause (b).
(2) The fee collected by a recognised stock exchange under sub-clause (1) during a
calendar month shall be paid by the stock exchange to the Board by the fifth working day
of the following calendar month.
(3) All recognised stock exchanges shall maintain such registers and furnish such returns
or information to the Board in respect of the fee collected under this Schedule, as may be
specified by the Board.
(4) Without prejudice to sub-clause (3), a recognised stock exchange shall also be liable
to furnish such information or explanations to the Board as may be required by it in
respect of fee collected or liable to be collected under this Schedule.
6. (1) Nothing contained in clause 5 shall affect the primary liability of a stock broker to
pay the fees under clause 3 or shall preclude the Board from recovering any such fee
remaining unpaid by any stock broker directly from him.
(2) Where due to the stock broker’s default any fee which was liable to be paid on his
behalf under clause 5 remains unpaid or is paid belatedly, he shall, without prejudice to
any other action that may be taken under the Act, rules or regulations, pay an interest of
15 per cent. per annum for every month of delay or part thereof to the Board.
(3) Every stock broker shall be liable to furnish such information or explanations to the
Board as may be required by it in respect of fee paid or payable under this Schedule.”]
[SCHEDULE IV
[Regulation 16G (1)]
FEES TO BE PAID BY THE TRADING OR CLEARING MEMBER 76[OR SELFCLEARING
MEMBER] OF DERIVATIVES EXCHANGE / DERIVATIVES
SEGMENT / CLEARING CORPORATION / CLEARING HOUSE.
1. A clearing member shall pay a fee of 77[Rs. 50, 000/-] every year till his registration is
in force, in the manner specified below:-
(a) for the first financial year along with the application for registration;
(b) for the subsequent financial years before 1st June of that financial year.
78[“2. Every trading member shall pay to the Board, a fee in respect of the transactions
undertaken by him on the derivatives segment of a recognised stock exchange, at the rate
of 0.0002 per cent. of his turnover (Rs.20/- per crore).
76 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2001, w.e.f. 15-11-
2001.
77 Substituted for Rs. 25,000 by the SEBI (Stock Brokers and Sub-brokers) (Third Amendment)
Regulations, 2006, w.e.f. 1-10-2006..
78 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Third Amendment) Regulations, 2006, w.e.f.
1-10-2006. Prior to substitution, it was read as under:
“2. A trading member shall pay every year a fee till his registration is in force, in the
manner specified below:-
(a) where the annual turnover does not exceed Rs. 500 crore in the financial year, a sum
of Rs. 10, 000 for each financial year; and
(b) where the annual turnover exceeds Rs. 500 crore in the financial year, a sum of Rs.
10, 000 plus 10 paisa per Rs. 1, 00, 000 of turnover, for the turnover in excess of Rs. 500
crore in the financial year.
Explanation: For the purpose of clause 2, the expression `annual turnover’ shall mean the
aggregate value of all trades executed by the trading member on the derivatives exchange
or the derivatives segment and shall also include the value of trades settled on the
expiration of derivatives contracts.
59*[However, for option contracts, the `annual turnover’ shall be computed on the basis of
the premium traded for the option contracts and in case where the option is exercised /
assigned, the `annual turnover’ shall be computed on the basis of the notional value of the
Explanation: (A) For the purpose of this clause, the expression ‘turnover’ shall include
the value of the trades executed by the trading member on the derivatives segment of the
recognised stock exchange and of the trades settled on the expiration of derivatives
contracts.
(B) In case of options contracts, ‘turnover’ shall be computed on the basis of premium
traded for the option contracts and in case where the option is exercised or assigned, it
shall be additionally computed on the basis of notional value of option contracts
exercised or assigned.”]
79[2A The “self-clearing member” shall pay every year a fee as specified in clause 1 & 2.
The provisions of clauses 3 to 6 shall be applicable mutatis mutandis to a self-clearing
member.]
80[“3. (1) Every recognised stock exchange shall collect from every trading member,
clearing member and self-clearing member, the fee payable under clause 2 in respect of
his turnover in the derivatives segment of that stock exchange in accordance with the
provisions of its bye-laws.
(2) The fee collected by a recognised stock exchange under sub-clause (1) during a
calendar month shall be paid by the stock exchange to the Board by the fifth working day
of the following calendar month.
option contracts exercised / assigned, in addition to the annual turnover’ computed on the
basis of premium traded]
79 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations,
2003, w.e.f. 15-11-2003.
80 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Third Amendment)
Regulations, 2006, w.e.f. 1-10-2006. Prior to substitution, it was read as under:
“3. Every remittance of fees by a trading member as specified in clause 2 shall be made
every financial year as under:-
(a) For the first financial year in which certificate of registration is granted a sum of Rs.
10, 000/- shall be paid along with the application for registration.
(b) For the subsequent financial years from the initial registration:
(i) A sum of Rs. 10, 000/- shall be paid before 1st June of that financial year; and
(ii) A balance fee of the preceding financial year for the turnover in excess of Rs.500
crores shall be paid before the 1st June of the financial year.
(c) The remittance shall be accompanied by a certificate authenticating the turnover by
the concerned derivatives exchange or derivatives segment.”

(3) All recognised stock exchanges shall maintain such registers and furnish such returns
or information to the Board in respect of the fee collected under this Schedule, as may be
specified by the Board.
(4) Without prejudice to sub-clause (3), a recognised stock exchange shall also be liable
to furnish such information or explanations to the Board as may be required by it in
respect of fee collected or liable to be collected under this Schedule.”]
4. A trading member who also acts as a clearing member shall pay the annual fee
separately, as applicable to each category 81[as specified in clause 1 and 2 above].
82[“5. (1) Nothing contained in clause 3 shall affect the primary liability of a trading
member to pay the fees under clause 2 or shall preclude the Board from recovering any
such fee remaining unpaid by any trading member directly from him.
(2) Where due to the trading member’s default any fee which was liable to be paid on his
behalf under clause 3 remains unpaid or is paid belatedly, he shall, without prejudice to
any other action that may be taken under the Act, rules or regulations, pay an interest of
15 per cent. per annum for every month of delay or part thereof to the Board.
(3) Every trading member shall be liable to furnish such information or explanations to
the Board as may be required by it in respect of fee paid or payable under this
Schedule.”]
6. The financial year shall mean the year commencing from 1st April and ending on 31st
March of the following year.
** Notification: No. GSR 780(E), dated 23-10-1992.s
81 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Third Amendment)
Regulations, 2006, w.e.f. 1-10-2006 for the words, “as specified in clause 2 and 3”
82 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Third Amendment)
Regulations, 2006, w.e.f. 1-10-2006 for the words,
“ 5. The fees indicated above shall be paid by draft in favour of ` Securities and Exchange
Board of India, Mumbai’. Such draft shall be forwarded to the Board through the
concerned derivatives exchange or derivatives segment or clearing corporation or
clearing house.’’

SEBI Stock Broker Regulations - Part-3

SCHEDULE I – FORMS
FORM A
SECURITIES AND EXCHANGE BOARD OF INDIA
(Stock Brokers And Sub-Brokers) Regulations, 1992
(Regulation 3)
APPLICATION FORM FOR REGISTRATION AS STOCK BROKERS WITH
SECURITIES AND EXCHANGE BOARD OF INDIA
NAME OF THE STOCK EXCHANGE:
1. Name of Member with Code No.
2. Address of Member
3. Trade name of Member
4. Form of Organisation - Sole proprietorship, partnership, corporate body, financial
institution. Please give names of proprietor / partners / directors.
5. Educational Qualifications
6. Date of admission to membership
7. Whether member of more than one Stock Exchange?
If so, please give name(s) of the Stock Exchange(s) with Code Number(s).
8. Indicate Fax, Telex and Phone number(s) of office and residence.
9. In the case of members admitted on any Stock Exchange after February 21, 1992 the
copy of the information given to the Stock Exchange at the time of admission.
I declare that the information given in this form is true to the best of my knowledge and
belief.
Dated: Signature
Recommendation of the Stock Exchange
This is to certify that _________________ is a member of this Exchange and is
recommended for registration with the Securities and Exchange Board of India.
Signature
Name
Designation
50FORM AA
SECURITIES AND EXCHANGE BOARD OF INDIA
(STOCK BROKERS AND SUB-BROKERS) REGULATIONS, 1992
(REGULATION 16A)
APPLICATION FORM FOR REGISTRATION AS A TRADING AND / OR A
CLEARING MEMBER 51[and / or a self clearing member] WITH THE SECURITIES
AND EXCHANGE BOARD OF INDIA
1. Name of the Derivatives Exchange / Segment / Clearing Corporation / Clearing House
of which the applicant is the member. Please furnish the tenure of membership.
2. Name of the Member with Code No.
3. Whether the applicant is to act as a Trading member and/or a Clearing member 52[and /
or a self clearing member]
4. If the applicant is to act as a Trading member, the applicant is required to furnish the
name and details of the clearing member 53[or self clearing member] through whom he
intend to clear and settle his trade.
5. Address of the Member
6. Trade Name of Member
7. Form of Organisation: sole proprietorship / partnership / corporate body / financial
institution. (Please give names of proprietor/ partners/directors)
8. Please furnish a copy of the Memorandum and Articles of Association or the
Partnership Deed, as the case may be.
9. Educational Qualifications of proprietor/partners /directors, etc.
10. Whether the applicant or its sales personnel or approved user has passed any
certification programme? If so, please specify the detail.
50 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2000, w.e.f. 14-3-
2000.
51 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2001, w.e.f15-11-
2001.
52 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2001, w.e.f15-11-
2001.
53 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2001, w.e.f. 15-11-
2001.
11. The experience of the applicant or their two directors or partners in derivatives
trading or securities market, if so, please give details.
12. Date of admission to membership to the derivatives exchange or derivatives segment /
clearing corporation / clearing house.
13. Whether a member of more than one exchange or derivatives segment or clearing
corporation or clearing house of any segment? If So, please give name (s) of the clearing
corporation / clearing house, or any stock exchange(s) with code number(s)?
14. Networth of the applicant. Please furnish details along with necessary documents in
support thereof.
15. Whether the applicant or its director or partners, any time convicted of any economic
offence ? If so, please furnish the details?
16. Whether the applicant or its directors or partners, declared insolvent / bankrupt or
declared defaulter by any exchange? If so, please furnish details?
17. Whether the applicant or its directors or partners anytime subjected to any
proceedings or penalty by the Board under SEBI Act or any of the regulations framed
under the SEBI Act? If so, please furnish the details.
18. Indicate fax, telex and phone number(s)
19. Whether the application is accompanied by a requisite fee as per Schedule IV of the
Regulations as applicable to the applicant.
I declare that the information given in this form is true and in the event of any
information furnished is false, misleading or suppression of facts, my certificate of
registration is liable to be cancelled by SEBI without assigning any reasons whatsoever.
Dated: Signature:
_____________________________________________________________________
Recommendation of the derivatives exchange / derivatives segment, clearing corporation
/ house.
This is to certify that __________________________ is a member of this Derivatives
Exchange / Derivatives Segment or Clearing Corporation or Clearing House and is
recommended for registration with the Securities and Exchange Board of India.
Signature
Name
Designation
FORM B
SECURITIES AND EXCHANGE BOARD OF INDIA
(Stock Brokers and Sub-Brokers) Regulations, 1992
(Regulation 11)
APPLICATION FORM FOR REGISTRATION AS A SUB-BROKER WITH
SECURITIES AND EXCHANGE BOARD OF INDIA
1. Name of applicant sub-broker:
2. Trader name of sub-broker, firm, corporate body.
3. Form of organisation – sole proprietorship, partnership, corporate body. Please give
names of proprietor, all partners, directors etc.
4. Educational qualifications of proprietor, partners, directors etc.
Name Status Qualifications
5. Name of the member-broker and Stock Exchange to which applicant is affiliated.
6. Date of acquiring sub-brokership
7. Infrastructural arrangements - indicate fax, telex, phones, number of offices and
residential numbers. Also indicate the number of employees.
Office Address
Phone No
Telex No
Fax No
Residential phone nos. of proprietor, partners, directors etc.
8. Number of branch offices and their location with phone, telex and fax numbers.
I certify that the information given in this application form is true to the best of my/our
knowledge and belief.
Recommendation letter from the stock broker to whom I/we am/are affiliated and two
references, including one from the banker as required are enclosed.
Signature___________________
Date_______________________
_______________________________________________________________________
Recommendation of the Stock Exchange.
This is to certify that ________________________________ is a 54[recognized] subbroker
affiliated to_________________________________ member-broker of this
Exchange.
The application is recommended/not recommended for registration by the Board.
AUTHORISED SIGNATORY
Signature
__________________________ Stock Exchange.

__________________________ Stock Exchange.
FORM C
SECURITIES AND EXCHANGE BOARD OF INDIA
(STOCK BROKERS & SUB-BROKERS) REGULATIONS, 1992
RECOMMENDATION LETTER TO BE GIVEN BY THE MEMBER
WITH WHOM THE SUB-BROKER IS AFFILIATED
To,
The ____________________________________ Stock Exchange
Dear Sirs,
I/We understand that___________________________ son of_______ aged_______
Years, residing at_____________________________ and attached to me
at_________________________ for carrying on the shares and securities business as a
sub- broker.
I/We confirm that ______________________ is transacting business through me for a
period from ______________ and he is a fit and proper person to be registered as a subbroker.
54 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2003, w.e.f. 23-9-
2003.
I/We also confirm that he is known to me/us for well over_____ years and he has got
good financial background, moral character and integrity. He has been transacting
business frequently and was meeting the market commitments as and when they arise.
I/We hereby recommend his application for granting registration for carrying on shares
and securities business as sub-broker. I/We also wish to state that whatever the
information that has been submitted is true to the best of my/our knowledge and if at a
later date if any material information comes to my/our knowledge subsequent to the
submission of this application, I/We undertake to keep informed about the same.
I/We member/s of ___________________________Exchange hereby agree to
recommend the above mentioned applicant.
Yours faithfully,
Signature of Member (s).
55[FORM CA]
Securities and Exchange Board of India
(Stock Brokers and Sub Brokers) Regulations, 1992.
Recognition letter to be issued by the Stock Exchange
To,
The Securities and Exchange Board of India,
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]
55 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2003, w.e.f. 23-9-
2003.
FORM D
SECURITIES AND EXCHANGE BOARD OF INDIA
(Stock Brokers and Sub-Brokers) Regulations, 1992
(Regulation 6)
CERTIFICATE OF REGISTRATION
In exercise of the powers conferred by sub-section (1) of section 12 of the Securities and
Exchange Board of India Act, 1992 read with the rules and regulations made thereunder,
the Board hereby grants a certificate of registration to_____________________________
a member of the _________________________________________ Stock Exchange(s)
as a Stock Broker for carrying on the activities of buying, selling or dealing in securities
and carrying on such other activities as are permitted by such Stock Exchange(s) subject
to conditions prescribed in the rules and in accordance with the regulations.
Registration number allotted is as under:
_________________________________________
This certificate shall be valid till it is suspended or cancelled in accordance with the
regulations.
Date: ______________ By Order
For and on behalf of
Securities and Exchange Board of India
56 [FORM DA
SECURITIES AND EXCHANGE BOARD OF INDIA
(STOCK BROKERS AND SUB BROKERS) REGULATIONS, 1992
(Regulation 16 D)
CERTIFICATE OF REGISTRATION
In exercise of the powers conferred by sub section (1) of section 12 of the Securities and
Exchange Board of India Act, 1992 read with the rules and regulations made thereunder,
the Board hereby grants a certificate of registration to
__________________________________ a member of the __________________
derivatives exchange / derivatives segment / clearing corporation / clearing house as
trading / clearing member 57[or self-clearing member] for carrying on the activities of
dealing in derivatives / clearing & settlement of derivatives trades and for carrying on
56 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2000, w.e.f. 14-3-
2000.
57 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2001, w.e.f. 15-11-
2001.
such other activities as are permitted by such exchange(s) / segment(s) / clearing
corporation / clearing house subject to the conditions prescribed therefor, from time to
time, by the Board.
Registration number allotted is as under:
_________________________
This certificate shall be valid till it is suspended or cancelled in accordance with the
Regulations.
Date : _______________
By order
For and on behalf of
Securities and Exchange Board of India
FORM E
SECURITIES AND EXCHANGE BOARD OF INDIA
(Stock Brokers and Sub-Brokers) Regulations, 1992
(Regulation 12)
CERTIFICATE OF REGISTRATION
In exercise of the powers conferred by sub-section (1) of section 12 of the Securities and
Exchange Board of India Act, 1992 read with the rules and regulations made thereunder,
the Board hereby grants a certificate of registration to ___________________ as a Sub-
Broker subject to the Rules and in accordance with the regulations.
Registration number allotted is as under:
_________________________________________
This certificate shall be valid till it is suspended or cancelled in accordance with the
regulations.
Date: __________
By Order
For and on behalf of
Securities and Exchange Board of India

SCHEDULE II
SECURITIES AND EXCHANGE BOARD OF INDIA
(STOCK BROKERS AND SUB-BROKERS) REGULATIONS, 1992
CODE OF CONDUCT FOR STOCK BROKERS
(Regulation 7)
A. GENERAL
(1) INTEGRITY: A stock-broker, shall maintain high standards of integrity, promptitude
and fairness in the conduct of all his business.
(2) EXERCISE OF DUE SKILL AND CARE: A stock-broker, shall act with due skill,
care and diligence in the conduct of all his business.
(3) MANIPULATION: A stock-broker shall not indulge in manipulative, fraudulent or
deceptive transactions or schemes or spread rumours with a view to distorting market
equilibrium or making personal gains.
(4) MALPRACTICES: A stock-broker shall not create false market either singly or in
concert with others or indulge in any act detrimental to the investors interest or which
leads to interference with the fair and smooth functioning of the market. A stock-broker
shall not involve himself in excessive speculative business in the market beyond
reasonable levels not commensurate with his financial soundness.
(5) COMPLIANCE WITH STATUTORY REQUIREMENTS: A stock-broker shall
abide by all the provisions of the Act and the rules, regulations issued by the
Government, the Board and the stock exchange from time to time as may be applicable to
him.
B. DUTY TO THE INVESTOR
(1) EXECUTION OF ORDERS: A stock-broker, in his dealings with the clients and the
general investing public, shall faithfully execute the orders for buying and selling of
securities at the best available market price and not refuse to deal with a Small Investor
merely on the ground of the volume of business involved. A stock-broker shall promptly
inform his client about the execution or non-execution of an order, and make prompt
payment in respect of securities sold and arrange for prompt delivery of securities
purchased by clients.
(2) ISSUE OF CONTRACT NOTE: A stock-broker shall issue without delay to his client
58[or client of the sub-broker, as the case may be] a contract note for all transactions in
the form specified by the stock exchange.
(3) BREACH OF TRUST: A stock-broker shall not disclose or discuss with any other
person or make improper use of the details of personal investments and other information
of a confidential nature of the client which he comes to know in his business relationship.
(4) BUSINESS AND COMMISSION:
(a) A stock-broker shall not encourage sales or purchases of securities with the sole
object of generating brokerage or commission.
(b)A stock-broker shall not furnish false or misleading quotations or give any other false
or misleading advice or information to the clients with a view of inducing him to do
business in particular securities and enabling himself to earn brokerage or commission
thereby.
(5) BUSINESS OF DEFAULTING CLIENTS: A stock-broker shall not deal or transact
business knowingly, directly or indirectly or execute an order for a client who has failed
to carry out his commitments in relation to securities with another stock-broker.
(6) FAIRNESS TO CLIENTS: A stock-broker, when dealing with a client, shall disclose
whether he is acting as a principal or as an agent and shall ensure at the same time, that
no conflict of interest arises between him and the client. In the event of a conflict of
interest, he shall inform the client accordingly and shall not seek to gain a direct or
indirect personal advantage from the situation and shall not consider clients' interest
inferior to his own.
(7) INVESTMENT ADVICE: A stock-broker shall not make a recommendation to any
client who might be expected to rely thereon to acquire, dispose of, retain any securities
unless he has reasonable grounds for believing that the recommendation is suitable for
such a client upon the basis of the facts, if disclosed by such a client as to his own
security holdings, financial situation and objectives of such investment. The stock-broker
should seek such information from clients, wherever he feels it is appropriate to do so.
59[(7A) Investment Advice in publicly accessible media –
(a) A stock broker or any of his employees shall not render, directly or indirectly, any
investment advice about any security in the publicly accessible media, whether real - time
or non real-time, unless a disclosure of his interest including the interest of his dependent
family members and the employer including their long or short position in the said
security has been made, while rendering such advice.
58 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2000, w.e.f. 13-9-
2003.
59 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2001, w.e.f. 29-5-
2001.
(b) In case, an employee of the stock broker is rendering such advice, he shall also
disclose the interest of his dependent family members and the employer including their
long or short position in the said security, while rendering such advice.]
(8) COMPETENCE OF STOCK BROKER: A stock-broker should have adequately
trained staff and arrangements to render fair, prompt and competent services to his
clients.
C. STOCK-BROKERS VIS-A-VIS OTHER STOCK-BROKERS
(1) CONDUCT OF DEALINGS: A stock-broker shall co-operate with the other
contracting party in comparing unmatched transactions. A stock-broker shall not
knowingly and willfully deliver documents which constitute bad delivery and shall cooperate
with other contracting party for prompt replacement of documents which are
declared as bad delivery.
(2) PROTECTION OF CLIENTS INTERESTS: A stock-broker shall extend fullest cooperation
to other stock-brokers in protecting the interests of his clients regarding their
rights to dividends, bonus shares, right shares and any other right related to such
securities.
(3) TRANSACTIONS WITH STOCK-BROKERS: A stock-broker shall carry out his
transactions with other stock-brokers and shall comply with his obligations in completing
the settlement of transactions with them.
(4) ADVERTISEMENT AND PUBLICITY: A stock-broker shall not advertise his
business publicly unless permitted by the stock exchange.
(5) INDUCEMENT OF CLIENTS: A stock-broker shall not resort to unfair means of
inducing clients from other stock- brokers.
(6) FALSE OR MISLEADING RETURNS: A stock-broker shall not neglect or fail or
refuse to submit the required returns and not make any false or misleading statement on
any returns required to be submitted to the Board and the stock exchange.
60[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.]
60 Inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2003, w.e.f. 23-9-
2003.
SECURITIES AND EXCHANGE BOARD OF INDIA
(STOCK BROKERS & SUB-BROKERS) Regulations, 1992
CODE OF CONDUCT FOR SUB-BROKERS
(Regulation 15)
A. GENERAL
(1) INTEGRITY: A sub-broker, shall maintain high standards of integrity, promptitude
and fairness in the conduct of all investment business.
(2) EXERCISE OF DUE SKILL AND CARE: A sub-broker, shall act with due skill, care
and diligence in the conduct of all investment business.
B. DUTY TO THE INVESTOR
(1) EXECUTION OF ORDERS: A sub-broker, in his dealings with the clients and the
general investing public, shall faithfully execute the orders for buying and selling of
securities at the best available market price. A sub-broker shall promptly inform his client
about the execution or non-execution of an order 61[******]
62 [(2) A sub-broker shall render necessary assistance to his client in obtaining the
contract note from the stock broker]
(3) BREACH OF TRUST: A sub-broker shall not disclose or discuss with any other
person or make improper use of the details of personal investments and other information
of a confidential nature of the client which he comes to know in his business relationship.
(4) BUSINESS AND COMMISSION:
(a) A sub-broker shall not encourage sales or purchases of securities with the sole object
of generating brokerage or commission.
(b)A sub-broker shall not furnish false or misleading quotations or give any other false or
misleading advice or information to the clients with a view of inducing him to do
61 Words ‘and make payment in respect of securities sold and arrange for prompt delivery of securities
purchased by clients” inserted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations,
2003, w.e.f. 23-9-2003.
62 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2003, w.e.f. 23-9-
2003 for the words, “
(2) A. Issue of purchase or sale notes:
(a) A sub-broker shall issue promptly to his clients purchase or sale notes for all the transactions entered
into by him with his clients.
(b) A sub-broker shall issue promptly to his clients scrip wise split purchase or sale notes and similarly bills
and receipts showing the brokerage separately in respect of all transactions in the specified form.
(c) A sub-broker shall only split the contract notes client-wise and scrip wise originally issued to him by the
affiliated broker into different denominations.
(d) A sub-broker shall not match the purchase and sale orders of his clients and each such order must
invariably be routed through a member-broker of the stock exchange with whom he is affiliated.”
business in particular securities and enabling himself to earn brokerage or commission
thereby.
(c)A sub-broker shall not charge from his clients a commission exceeding one and onehalf
of one percent of the value mentioned in the respective sale or purchase notes.
(5) BUSINESS OF DEFAULTING CLIENTS: A sub-broker shall not deal or transact
business knowingly, directly or indirectly or execute an order for a client who has failed
to carry out his commitments in relation to securities and is in default with another broker
or sub-broker.
(6) FAIRNESS TO CLIENTS: A sub-broker, when dealing with a client, shall disclose
that he is acting as an agent 63[******] ensuring at the same time, that no conflict of
interest arises between him and the client. In the event of a conflict of interest, he shall
inform the client accordingly and shall not seek to gain a direct or indirect personal
advantage from the situation and shall not consider clients' interest inferior to his own.
(7) INVESTMENT ADVICE: A sub-broker shall not make a recommendation to any
client who might be expected to rely thereon to acquire, dispose of, retain any securities
unless he has reasonable grounds for believing that the recommendation is suitable for
such a client upon the basis of the facts, if disclosed by such a client as to his own
security holdings, financial situation and objectives of such investment. The sub-broker
should seek such information from clients, wherever they feel it is appropriate to do so.
64[7A – Investment Advice in publicly accessible media –
(a) A sub-broker or any of his employees shall not render, directly and indirectly any
investment advice about any security in the publicly accessible media, whether real –
time or non real-time, unless a disclosure of his interest including his long or short
position in the said security has been made, while rendering such advice.
(b) In case, an employee of the sub-broker is rendering such advice, he shall also disclose
the interest of his dependent family members and the employer including their long or
short position in the said security, while rendering such advice.]
(8) COMPETENCE OF SUB-BROKER: A sub-broker should have adequately trained
staff and arrangements to render fair, prompt and competent se

SEBI Stock Broker Regulation - Part-2

CHAPTER IV
GENERAL OBLIGATIONS AND RESPONSIBILITIES

To maintain proper books of accounts, records etc.

17

(1) Every stock-broker shall keep and maintain the following books of accounts,
records and documents namely; -
(a) Register of transactions (Sauda Book);
(b) Clients ledger;
(c) General ledger;
(d) Journals;
(e) Cash book;
(f) Bank pass book;
(g) Documents register containing, inter-alia, particulars of securities received
and delivered in physical form and the statement of accounts and other records
relating to receipt and delivery of securities provided by the Depository
Participants in respect of dematerialized securities.
(h) Members' contract books showing details of all contracts entered into by him
with other members of the same exchange or counterfoils or duplicates of memos of confirmation issued to such other member;
(i) Counterfoils or duplicates of contract notes issued to clients;
(j) Written consent of clients in respect of contracts entered into as principals;
(k) Margin deposit book;
(l) Registers of accounts of sub- brokers;
(m) an agreement with a sub- broker specifying the scope of authority and
responsibilities of the Stock-Broker and such sub- broker.
(n) An agreement with the stock broker and with the client of the sub-broker to
establish privity of contract between a stock broker and the client of the subbroker.

(2) Every stock-broker shall intimate to the Board the place where the books of
accounts, records and documents are maintained.

(3) Without prejudice to sub- regulation (1), every stock- broker shall, after the close of each accounting period furnish to the Board if so required as soon as possible but not later than six months from the close of the said period a copy of the audited balance sheet and profit and loss account, as at the end of the said
accounting period:

Provided that, if it is not possible to furnish the above documents within the time
specified, the stock-broker shall keep the Board informed of the same together
with the reasons for the delay and the period of time by which such documents
would be furnished.

Maintenance of books of accounts and records

18. Every stock broker shall preserve the books of account and other records maintained under regulation 17 for a minimum period of five years.

Appointment of compliance officer

18A (1) Every stock broker shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines instructions, etc, issued by the Board or the Central Government and for redressal of investors grievances.

(2) The compliance officer shall immediately and independently report the Board any
non-compliance observed by him

Stock broker not to deal with unregistered stock broker.

18B 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.

CHAPTER V

PROCEDURE FOR INSPECTION

Board's right to inspect.

19 (1) Where it appears to the Board so to do, it may appoint one or more persons as
inspecting authority to undertake inspection of the books of accounts, other
records and documents of the stock- brokers for any of the purposes specified in
sub-regulation (2).
(2) The purposes referred to in sub-regulation (1) shall be as follows, namely:
(a) to ensure that the books of accounts and other books are being maintained in
the manner required;
(b) that the provisions of the Act, rules, regulations and the provisions of the
Securities Contracts (Regulation) Act and the rules made thereunder are being
complied with;
(c) to investigate into the complaints received from investors, other stock brokers,
sub-brokers or any other person on any matter having a bearing on the
activities of the stock- brokers; and
(d) to investigate suo-moto, in the interest of securities business or investors'
interest, into the affairs of the stock- broker.

Procedure for inspection.

20. (1) Before undertaking any inspection under regulation 19, the Board shall give a
reasonable notice to the stock- broker for that purpose.
(2) Notwithstanding anything contained in sub-regulation (1), where the Board is
satisfied that in the interest of the investors or in public interest no such notice
should be given, it may by an order in writing direct that the inspection of the
affairs of the stock broker be taken up without such notice.
(3) On being empowered by the Board, the inspecting authority shall undertake the
inspection and the stock-broker against whom an inspection is being carried out
shall be bound to discharge his obligations as provided under regulation 21.
Obligations of stock - broker on inspection by the Board.
21. (1) It shall be the duty of every director, proprietor, partner, officer and employee of the stock-broker, who is being inspected, to produce to the inspecting authority such books, accounts and other documents in his custody or control and furnish him with the statements and information relating to the transactions in securities market within such time as the said officer may require.

(2) The stock-broker shall allow the inspecting authority to have reasonable access
to the premises occupied by such stock- broker or by any other person on his
behalf and also extend reasonable facility for examining any books, records,
documents and computer data in the possession of the stock- broker or any other
person and also provide copies of documents or other materials which, in the
opinion of the inspecting authority are relevant.

(3) The inspecting authority, in the course of inspection, shall be entitled to examine or record statements of any member, director, partner, proprietor and employee of the stock- broker.

(4) It shall be the duty of every director proprietor, partner, officer and employee of the stock broker to give to the inspecting authority all assistance in connection
with the inspection, which the stock broker may be reasonably expected to give.
Submission of Report to the Board.

22. The inspecting authority shall, as soon as may be possible, submit an inspection
report to the Board.

Action on inspection or investigation report

23. The Board shall after consideration of inspection or investigation report take such action as it may deem fit and appropriate including action under the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and
Imposing Penalty) Regulations, 2002, Chapter VIA of the Act or section 24 of the
Act.

24. Notwithstanding anything contained above, the Board may appoint a qualified auditor to investigate into the books of account or the affairs of the stock-broker:
Provided that, the auditor so appointed shall have the same powers of the inspecting
authority as mentioned in regulation 19 and the obligations of the stock- broker in
regulation 21 shall be applicable to the investigation under this regulation.

CHAPTER VI

PROCEDURE FOR ACTION IN CASE OF DEFAULT

25. Liability for contravention of the Act, rules or the regulations – A stock
broker or a sub-broker who contravenes any of the provisions of the Act, rules or
regulations framed thereunder shall be liable for any one or more of the following actions
–
(i) Monetary penalty under Chapter VIA of the Act.
(ii) Penalties as specified under Securities and Exchange Board of India
(Procedure for Holding Enquiry Officer and Imposing Penalty) Regulation,
2002 including suspension or cancellation of certificate of registration as a
stock broker or a sub-broker.
(iii) Prosecution under section 24 of the Act.
26. Liability for monetary penalty – A stock broker or a sub-broker shall be liable
for monetary penalty in respect of the following violations, namely -
(i) Failure to file any return or report with the Board.
(ii) Failure to furnish any information, books or other documents within 15 days
of issue of notice by the Board.
(iii) Failure to maintain books of accounts or records as per the Act, rules or
regulations framed thereunder.
(iv) Failure to redress the grievances of investors within 30 days of receipt of
notice from the Board.
48 Regulations 25to 28 substituted for regulation 25 by the SEBI (Stock Brokers and Sub-brokers)
(Amendment) Regulations, 2003, w.e.f. 20-11-2003. Prior to substitution, these were read as,
“ Liability for action in case of default – (1) A sub-broker who
(a) fails to comply with any conditions subject to which registration has been granted;
(b) contravenes any of the provisions of the Act, rules or regulations;
(c) contravenes the provisions of the Securities Contracts (Regulation) Act or the rules made
thereunder;
(d) contravenes the rules, regulations or bye-laws of the stock exchange;
shall be liable to any of the penalties specified in sub-regulation (2).
(2) The penalties referred to in sub-regulation (1) may be either—
(a) suspension of registration after the inquiry, for a specified period; or
(b) cancellation of registration.
(v) Failure to issue contract notes in the form and manner specified by the stock
exchange of which sub broker is a member.
(vi) Failure to deliver any security or make payment of the amount due to the
investor within 48 hours of the settlement of trade unless the client has agreed
in writing otherwise.
(vii) Charging of brokerage which is in excess of brokerage specified in the
regulations or the bye-laws of the stock exchange.
(viii) Dealing in securities of a body corporate listed on any stock exchange on his
own behalf or on behalf of any other person on the basis of any unpublished
price sensitive information.
(ix) Procuring or communicating any unpublished price sensitive information
except as required in the ordinary course of business or under any law.
(x) Counseling any person to deal in securities of any body corporate on the basis
of unpublished price sensitive information.
(xi) Indulging in fraudulent and unfair trade practices relating to securities.
(xii) Execution of trade without entering into agreement with the client under the
Act, rules or regulations framed thereunder or failure to maintain client
registration form or commission of any irregularities in maintaining the client
agreement.
(xiii) Failure to segregate his own funds or securities from the client’s funds or
securities or using the securities or funds of the client for his own purpose or
for purpose of any other client.
(xiv) Acting as an unregistered sub-broker or dealing with unregistered sub-brokers.
(xv) Failure to comply with directions issued by the Board under the Act or the
regulations framed thereunder.
(xvi) Failure to exercise due skill, care and diligence.
(xvii) Failure to seek prior permission of the Board in case of any change in its
status and constitution.
(xviii) Failure to satisfy the net worth or capital adequacy norms, if any, specified by
the Board.
(xix) Extending use of trading terminal to any unauthorized person or place.
(xx) Violations for which no separate penalty has been provided under these
regulations.

27. Liability for action under the Enquiry Proceeding Regulations – A stock
broker or a sub-broker shall be liable for any action as specified in the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and
Imposing Penalty) Regulations, 2002 including suspension or cancellation of his
certificate of registration as a stock broker or a sub-broker, as the case may be, if he-
(i) ceases to be a member of a stock exchange; or
(ii) has been declared defaulter by a stock exchange and not readmitted as a
member within a period of six months; or
(iii) surrenders his certificate of registration to the Board; or
(iv) has been found to be not a fit and proper person by the Board under these or
any other regulations ; or
(v) has been declared insolvent or order for winding up has been passed in the
case of a broker or sub-broker being a company registered under the
Companies Act, 1956; or
(vi) or any of the partners or any whole time director in case a broker or subbroker
is a company registered under the Companies Act, 1956 has been
convicted by a court of competent jurisdiction for an offence involving moral
turpitude; or
(vii) fails to pay fee as per Schedule III of these regulations; or
(viii) fails to comply with the rules, regulations and bye-laws of the stock exchange
of which he is a member; or
(ix) fails to co-operate with the inspecting or investigating authority; or
(x) fails to abide by any award of the Ombudsman or decision of the Board under
the Securities and Exchange Board of India (Ombudsman) Regulations, 2003;
or
(xi) fails to pay the penalty imposed by the Adjudicating Officer; or
(xii) indulges in market manipulation of securities or index; or
(xiii) indulges in insider trading in violation of Securities and Exchange Board of
India (Prohibition of Insider Trading) Regulations, 1992; or
(xiv) violates Securities and Exchange Board of India (Prohibition of Fraudulent
and Unfair Trade Practices relating to Securities Market) Regulations, 2003;
or
(xv) commits violation of any of the provisions for which monetary penalty or
other penalties could be imposed; or
(xvi) fails to comply with the circulars issued by the Board; or
(xvii) commits violations specified in regulation 26 which in the opinion of the
Board are of a grievous nature.

28. Liability for prosecution – A stock broker or a sub-broker shall be liable for
prosecution under section 24 of the Act for any of the following violations, namely:-
(i) Dealing in securities without obtaining certificate of registration from the
Board as a stock broker or a sub-broker.
(ii) Dealing in securities or providing trading floor or assisting in trading outside
the recognized stock exchange in violation of provisions of the Securities
Contract (Regulation) Act, 1956 or rules made or notifications issued
thereunder.
(iii) Market manipulation of securities or index.
(iv) Indulging in insider trading in violation of Securities and Exchange Board of
India (Prohibition of Insider Trading) Regulations, 1992.
(v) Violating the Securities and Exchange Board of India (Prohibition of
Fraudulent and Unfair Trade Practices relating to Securities Market)
Regulations, 2003.
(vi) Failure without reasonable cause(
a) to produce to the investigating authority or any person authorized by him
in this behalf, any books registers, records or other documents which are
in his custody or power; or
(b) to appear before the investigating authority personally or to answer any
question which is put to him by the investigating authority or
(c) to sign the notes of any examination taken down by the investigating
authority.
(vii) Failure to pay penalty imposed by the adjudicating officer or failure to comply
with any of his directions or orders.]
49[*********]
49 Regulations 26 to 32 had been omitted by the Securities and Exchange Board of India (Procedure for
Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 w.e.f. 27-9-2002. Prior to
this these regulations were read as under:
“Suspension, cancellation of registration, etc.
26. (1) A penalty of suspension of registration of a stock- broker may be imposed if:-
(i) the stock-broker violates the provisions of the Act, rules and regulations;
(ii) the stock-broker does not follow the code of conduct annexed at Schedule II;
(iii) the stock-broker –
(a) fails to furnish any information related to his transactions in securities as required by the
Board;
(b) furnishes wrong or false information,
(c) does not submit periodical returns as required by the Board;
(d) does not co-operate in any enquiry conducted by the Board;
(iv) the stock-broker fails to resolve the complaints of the investors or fails to give a satisfactory
reply to the Board in this behalf;
(v) the stock-broker indulges in manipulating or price rigging or cornering activities in the market;
(vi) the stock-broker is guilty of misconduct or improper or unbusinesslike or unprofessional
conduct;
(vii) the financial position of the stock broker deteriorates to such an extent that the Board is of the
opinion that his continuance in securities business is not in the interest of investors and other
stock- brokers;
(viii) the stock-broker fails to pay the fees;
(ix) the stock-broker violates the conditions of registration;
(x) the membership of the stock- broker is suspended by the stock exchange:
Provided that the Board for reasons to be recorded in writing may in case of repeated
defaults of the type mentioned above impose a penalty of cancellation of registration of the
stock-broker.
(2) A penalty of cancellation of registration of a stock-broker may be imposed if:-
(i) the stock-broker violates any provisions of insider trading regulations or take-over
regulations;
(ii) The stock-broker is guilty of fraud, or is convicted of a criminal offence; and
(iii) cancellation of membership of the stock-broker by the stock exchange.
Manner of order of suspension or cancellation

27. No order of penalty of suspension and cancellation shall be imposed except after holding an enquiry in
accordance with the procedure specified in regulation 28.
a*[Provided that the holding of such an enquiry shall not be necessary in cases where the stock
broker:
(a) ceases to be a member of a recognised stock exchange; or
(b) is declared defaulter by the stock exchange and is not readmitted to the membership of the
exchange within a period of six months from such declaration ;or
(c) surrenders the membership of the stock exchange; or
(d) is declared insolvent by a Court; or
(e) fails to pay the registration or annual fees to the Board in the manner specified in the regulations;
or
(f) voluntarily surrenders certificate to the Board; or
(g) is wound up by an order passed by the Court.
Provided further that no action shall be taken against the stock broker without giving an
opportunity of hearing to the stock broker].
a. Proviso to regulation 27 was inserted by the SEBI (Stock Brokers and Sub Brokers)
(Amendment) Regulations, 1999 published in the Official Gazette of India dated 06.07.1999.

Manner of holding enquiry

28. (1) For the purpose of holding an enquiry under regulation 27, the Board may appoint an enquiry
officer.
(2) The enquiry officer shall issue to the stock-broker a notice at the registered office or the principal
place of business of the stock-broker.
(3) The stock-broker may, within thirty days from the date of receipt of such notice, furnish to the
enquiry officer a reply together with copies of documentary or other evidence relied on by him or
sought by the Board from him.
(4) The enquiry officer shall, give a reasonable opportunity of hearing to the stock-broker to enable
him to make submissions in support of his reply made under sub-regulation (3).
(5) Before the enquiry officer, the stock-broker may either appear in person or through any person
duly authorised on his behalf:
Provided that no lawyer or advocate shall be permitted to represent the stock-broker at the
enquiry:
Provided further that where a lawyer or an advocate has been appointed by the Board as a presenting officer under sub- regulation (6), it shall be lawful for the stock-broker to present his case through a lawyer or advocate.
(6) If it is considered necessary, the enquiry officer may request the Board to appoint a presenting
officer to present its case.
(7) The enquiry officer shall, after taking into account all relevant facts and submissions made by the
stock-broker, submit a report to the Board and recommend the penalty to be awarded as also on
the justification of the penalty proposed in the notice.
Show-cause notice and order

29. (1) On receipt of the report from the enquiry officer, the Board shall consider the same and issue a show-cause notice as to why the penalty as it considers appropriate should not be imposed.

(2) The stock-broker shall within twenty-one days of the date of the receipt of the show- cause send a reply to the Board.

(3) The Board after considering the reply to the show-cause notice, if received, shall as soon as possible but not later than thirty days from the receipt of the reply, if any, pass such order as it deems fit.

(4) Every order passed under sub- regulation (3) shall be self- contained and give reasons for the conclusions stated therein including justification of the penalty imposed by that order.

(5) The Board shall send a copy of the order under sub- regulation (3) to the stock- broker, stock exchange of which the stock-broker is the member, a*[******].

(5) The Board shall send a copy of the order under sub- regulation (3) to the stock- broker, stock exchange of which the stock-broker is the member, a*[******].
a. "and to the Central Government" omitted by the SEBI (Stock Brokers and Sub brokers)Amendment Regulations, 1999 published in the Official Gazette of India dated 06.07.1999.

Effect of suspension and cancellation of registration of stock-broker.

30. (1) On and from the date of the suspension of broker he shall cease to buy, sell or deal in securities as a stock-broker during the period of suspension.

(2) On and from the date of cancellation, the stock-broker shall with immediate effect cease to buy sell or deal in securities as a stock-broker.

Publication of order of suspension

31. The order of suspension or cancellation of certificate passed in sub- regulation (3) of regulation 29 shall be published in at least two daily newspapers by the Board be published in at least two daily newspapers by the Boards.

Appeal to the Securities Appellate Tribunal

32. a*[Any person aggrieved by an order of the Board made, on and after the commencement of the Securities Laws (Second Amendment) Act, 1999, (i.e., after 16th December 1999), under these regulations may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter]
a. Substituted for the following provision by the SEBI (Appeal to the Securities Appellate Tribunal) (Amendments) Regulations, 2000 published in the Official Gazette of India dated 28.03.2000
"Any person aggrieved by an order of the Board may prefer an appeal to the Central
Government"

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