Ref. SE/965

February 3, 1992

Dear Shri

It is observed that wile delivering the shares on sale in the market, the delivering broker is required to affix on the reverse of transfer deed a rubber stamp indicating his name, clearing number allotted to him by the Exchange of which he is a member and the date of such delivery. Some of these shares with transfer deeds are likely to be despatched from one Stock Exchange to another in the country during the validity of the transfer deed until the same are lodged by the last purchaser with the company or its shares transfer agent for transfer in his name. In case of bad delivery or some other problem with the shares and consequent refusal by the company or its share transfer agent to transfer the shares, the last purchaser or his broker is required to approach the first introducing broker for rectification of the defect(s). In the absence of the name of the Stock Exchange to which the introducing broker belongs, this task is rendered difficult. With a view to overcome the problem, it is suggested that the Stock Exchanges should instruct their member-brokers to affix with their names and clearing number, the abbreviation of the Stock Exchange of which they are members, viz, BOM (for Bombay Stock Exchange), and similarly CAL, MAD, ND, etc. This will facilitate forwarding of the documents for rectifications of the defect(s) to the introducing broker. We shall appreciate it if you would please arrange to ensure the implementation of the above suggestion under advice to us.

In the meanwhile, please acknowledge receipt of the letter.

With best regards,

Yours sincerely,

sd/-

(U. C. Dikshit)

Ref : SE/2376

April 3, 1992

The Presidents/Executive Directors

All Stock Exchanges.

Dear Sirs,

The Company agrees that it will furnish unaudited financial results on a half-yearly basis in the following proforma within two months of the expiry of the period to the Stock Exchange and will make an announcement forthwith to the stock exchanges where the company is listed and also within 48 hours of the conclusion of the Board Meeting atleast in one English daily newspaper circulating in the whole or substantially the whole of India and in a newspaper published in the language of the region, where the registered office of the company is situated. The Board of directors should take on record the unaudited half-yearly results which shall be signed by the Managing Director/Director. The Company shall inform the stock exchanges where its securities are listed about the date of Board meeting at least 15 days in advance and shall also issue immediately a press release in atleast one national newspaper and one regional language about the date of the aforesaid Board Meeting.

(Other paragraphs of the Clause remain the same)

Ref : SE/2936

April 6, 1992

The Presidents/Executive Directors

All Stock Exchanges.

Dear Sir,

You would recall that SEBI had made a proposal that the companies entering the capital market should deposit with the Stock Exchange a small percentage of the public offer which would be refunded to the company without interest within 15 days from the expiry of the prescribed period and the deposit would be forfeited if the company failed to comply with the listing requirements including repayment of funds due to applicants, despatch of share certificates, payment of brokerage, underwriting commission etc., within the prescribed period. In the case an issue is likely to be listed on more than one Stock Exchange, then the requisite amount should be deposited with the regional Stock Exchange i.e., the Stock Exchange which is situated nearest to the registered office of the company and where listing of its securities is compulsory.

The above suggestion has been implemented by the Bombay Stock Exchange by suitably amending the Listing Agreement as also the relevant Regulations of the Exchange so as to provide for collection of such deposit from the companies. Bombay Stock Exchange has decided to collect from the companies an amount equivalent to one per cent of the amount offered for subscription to the public and /or to the shareholders of the existing securities for ensuring compliance with the above requirements. A copy of the press release dated March 17, 1992 issued by the Bombay Stock Exchange, the contents of which are self-explanatory, is enclosed for your information and perusal.

You are advised to introduce necessary measures urgently to implement the scheme on the lines of the Bombay Stock Exchange by making suitable amendments to the Listing Agreement to be entered into by your Exchange with the companies and relevant Bye-laws and Regulations of your Exchange at an early date.

The steps taken in this regard may please be advised to us by a separate communication.

Meanwhile, please acknowledge receipt of this letter.

Yours faithfully,

sd/-
(U. C. Dikshit)

ADVISER

Ref : SE/3050

April 9, 1992

The Presidents/Executive Directors

All Stock Exchanges.

Dear Sir,

As you would know, the Government has disinvested a certain percentage of its equity holdings in public sector units in favour of mutual funds and investment institutions. The equity thus disinvested would be listed on the stock exchanges. With a view to providing adequate information through disclosures to the investors and member brokers so that they can take informed investment decisions, we advise that the shares of PSUs should be listed by the stock exchanges and traded only after disclosure documents are submitted to and approved by the SEBI as well as stock exchanges. Hence, we advise you to inform the PSUs which approach your Exchange for listing of these shares to send a set of disclosure documents to SEBI and to your Exchange, particularly the relevant information required in the abridged prospectus ("Memorandum" under Section 56 (3) of the Companies Act, 1956) and the extent of equity sold to mutual funds and investment institutions.

Kindly acknowledge the receipt of this letter.

Yours faithfully,

sd/-

U. C. Dikshit

ADVISER

Ref.SE/3117

April 10, 1992

To,

The Presidents and Executive Directors

of all the recognised Stock Exchanges.

Dear Sir,

As you would know, under Section 12(1) of the Securities & Exchange Board of India Act 1992, no stock broker shall buy or sell or deal in securities except under, and in accordance with the conditions of a certificate of registration obtained from the Securities & Exchange Board of India (SEBI) in accordance with the Rules and Regulations made thereunder. In case of a present member stock broker of recognised Stock Exchanges, he may continue to do his present business, if he has made an application for such registration within a period of 3 months from the establishment of the Board, till the disposal of such application. The Board was constituted on February 21, 1992 and hence, in terms of the SEBI Act, the present member stock brokers of the Stock Exchanges will have to submit their application through the Stock Exchanges (where they are members) to SEBI by May 21, 1992.

For the above purpose, we enclose an application form for registration as a Stock Broker with SEBI. You are requested to arrange to take copies of the application forms and supply them to the member-brokers of your Exchange and advise them to fill up the same in all details, enclosing supporting documents and registration fees by cheque/demand drafts favouring SEBI as prescribed in Schedule II (enclosed) and submit them to you by May 7, 1992.

The Exchange should carry out a scrutiny of applications received from the member stock brokers to ensure that all the required information has been furnished by the member stock brokers. After the scrutiny, the Stock Exchange should incorporate its recommendations and comments on the applications as envisaged therein and forward the same to SEBI alongwith the cheques/demand drafts given by member stock brokers. All such applications received by the Stock Exchanges and duly scrutinised by them, may be so forwarded as to reach SEBI by May 20, 1992 to enable it to process the same as required under the Act.

Kindly ensure that the above time schedule for submission of applications by the member stock brokers and scrutiny thereof by your Exchange is strictly adhered to.

Please acknowledge receipt of the letter.

Yours faithfully,

sd/-

Encl: As above

1. Name of applicant Member-Broker:

2. Trade name of member, firm, corporate body, institution:

3. Form of Organisation - Sole proprietorship, partnership, corporate body, financial institution. Please give name of proprietor, all partners, directors.

4. Educational Qualification of proprietor, partners, directors, etc.:

5. Name of Stock Exchange of which the applicant is a stock broker:

6. Date of acquiring membership:

7. Mode of acquiring membership (whether selected by the Exchange, transfer from relatives, or membership rights bought from the market, if bought from the market the purchase price of card may be indicated).

8. In case of new members please give details of past business, before the date of acquiring membership of the stock exchange.

9. Whether member of more than one stock exchange/s? If so, please give name of the stock exchange/s and code/s number/s allotted.

10. Number of membership cards of stock exchanges in the names of family members/close relatives.

Office Address Telex No. Phone No. Fax No.

Residential Phone of Proprietor, Partner & Directors

Number of employees No. of authorised assistants

No. of sub-broker - Secondary - Primary

Address of Branch Off. Phone No. Tlx.No. Fax No. Contact Person

1. Net worth (Rs. Lakhs) :

1. Paid up Capital

2. Free Reserves (excluding revaluation reserves)

3. Total (a+b).

1. Liquid Assets like cash, bank balance and marketable securities (Rs. lakhs) as on latest date.

13. Any disciplinary action taken by the Exchange against the member broker during the last three years like imposition of fines, suspension from trading, etc.

Nature of irregularity Action taken by the Exchange

14. Whether the member broker has been a office bearer/member of Council of Management/Governing Board of the Exchange during any of the last 3 years. Please give details.

15. Whether the stock broker has been a member of any committee of the stock exchange during any of the last three years. Please give details.

16. Number of pending arbitration cases filed against the member broker.

Name of Complainant investor / member-broker

Brief nature of dispute Progress of Arbitration

17. Details of court cases pending against the member stock broker, if any.

18. Number of complaints forwarded by stock exchange or SEBI/Government which are yet to be resolved.

Name of Complainant Nature of Complaint

Reason for delay in resolving the complaint

19. (a) Volume of Turnover during the year 1991-92 (Rs. lakhs) (as per

records maintained under the bye-laws of the stock exchange).

1. Out of (a) above turnover on account of jobbing.

1. Out of (a) above:

1. turnover in his own account :

2. turnover on behalf of individual investors :

3. turnover on behalf of corporate investors :

4. turnover on behalf of investment institutions/mutual funds.

1. Average daily turnover during the year (Rs. lakhs):

1. Volume of Turnover in specified and non-specified shares:

2. Delivery of securities taken during the year (Rs. Cr.):

3. Delivery of securities given during the year (Rs. Cr.):

20. Main activities in which the stock broker is involved (Please tick mark):

(a)Secondary Market

1. Primary Market

1. Investment advice

2. Portfolio Management

3. Underwriting

4. Issue management

5. Whether the person is authorised as merchant banker by SEBI

6. Market Maker

7. Any other, please specify.

21. Details of underwriting during 1991-92:

1. Number of issues underwritten:

2. Amount underwritten:

3. Any Devolvement? If yes, the names of issues, and how the liability was met.

22. Books maintained by the member broker (Please give names):

23. Any dues payable to the stock exchange?

24. Any suspension / default proceedings pending against the member broker.

25. Any newsletter being published by the stock broker (enclose a copy).

I/We certify that the information given in this application form is true to the best of my/our knowledge and belief. I/we shall promptly notify SEBI of any changes in the information during the period that my registration is being considered and if registration is accepted, also thereafter. I/we understand that any findings of false information at any stage of time, my/our registration shall be liable to cancellation.

I/We shall abide by the Code of Conduct, rules, regulations, guidelines and directives issued by SEBI from time to time.

Signatures:

Date:

Recommendation of the Stock Exchange:

This is to certify that _________________ is a member broker of this exchange since ___________ and no disciplinary action is pending against the member. (If pending, please specify the nature of irregularity and likely action against member).

Application is recommended/not recommended for registration by SEBI.

Authorised Signatory.

Signature

____________ Stock Exchange

1. FEES TO BE PAID BY BODY CORPORATE APPLICANTS:

REGISTRATION ANNUAL

RS.10 LAKHS RS.10,000

2. FEES TO BE PAID BY APPLICANTS OTHER THAN BODY CORPORATE APPLICANTS :

REGISTRATION ANNUAL

FEES FEES

(RS.) (RS.)

CATEGORY A 5 LAKHS 10,000

CATEGORY B 3 LAKHS 5,000

CATEGORY C 1 LAKH 3,000

The following points will be taken into consideration while examining the application form of a stock broker for registration with SEBI. An application may be rejected if there are many adverse points against the stock broker.

1. Completeness of application forms in all respects alongwith enclosures.

2. Cheque/draft for Registration fees enclosed.

3. Liquid Assets like cash, bank balance and marketable securities (Rs. lakhs) as on latest date as certified by a Chartered Accountant.

4. Disciplinary action taken by the Exchange against the member broker during the last three years like imposition of fines, suspension from trading, etc.

Nature of irregularity and action taken by the Exchange.

5. Number of pending arbitration cases filed against the member broker by the investors and other stock brokers.

Nature of disputes and progress of arbitration cases.

6. Details of court cases pending against the stock broker. Any criminal case?

7. Number of complaints forwarded by stock exchange or SEBI/Government which are yet to be resolved.

8. Volume of Turnover during the year 1991-92. (It will indicate whether the stock broker is inactive).

9. Any underwriting Devolvement?

10. Any dues payable to the clearing house or stock exchange?

11. Any suspension/default proceedings/disciplinary action pending against the member broker.

12. Recommendation of the stock exchange.

Ref:SE/4601

May 11, 1992

The Presidents and Executive Directors of

all Recognised Stock Exchanges.

Dear Sir,

As you would know, under Section 12(1) of the SEBI Act, 1992, no sub-broker who may be associated with securities market shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained from SEBI in accordance with the Rules and Regulations made thereunder. In case of sub-broker who may be associated with the securities market before the establishment of the Board, he may continue to do present business, if he has made an application for registration within a period of three months from the establishment of the Board, till the disposal of such application. The Board was constituted on February 21, 1992 and hence, in terms of the SEBI Act, the present sub-brokers will have to submit their applications through the Stock Exchanges to SEBI by May 21, 1992.

In this connection, it may be mentioned that the application of a sub-broker in the secondary market for registration (Annexure I) shall be accompanied by a sponsorship letter from member-broker of recognised Stock Exchange with whom he is affiliated (Annexure II) and two references including one from his banker. The application form shall be submitted by sub-broker to the Stock Exchange of which the broker, with whom he is affiliated, is a member. It should be noted in this connection that a sub-broker who is registered on the sponsorship of a member-broker can also transact business through other member brokers of the Stock Exchange with whom the sub-broker has made arrangements and he will report the names of these member-brokers to the Stock Exchange.

For the above purpose, we enclose an application for registration as sub-broker with SEBI. You are requested to arrange to prepare copies of application forms and supply them to the sponsoring brokers and sub-brokers and advise them to fill up the same in all details and enclosing supporting documents and submit them to you by May 19, 1992. In this connection, the Stock Exchange may issue a press release to inform the sub-brokers about the aforesaid registration with SEBI through the Stock Exchange.

The Stock Exchange shall then forward the applications of those applicants who comply with all the requirements as enumerated above so as to reach SEBI by May 21, 1992 to enable it to process the same as required under the Act.

The application fee as may be prescribed under the Rules and Regulations, should be remitted on receipt of advice from SEBI.

Kindly ensure that the above time schedule for submission of applications by sub-brokers through by your Exchange is adhered to.

Kindly acknowledge receipt of the letter.

Yours faithfully,

sd/-

1. Name of applicant sub-broker.

2. Trade name of sub-broker, firm, corporate body.

4. Educational qualifications of proprietor, partners, directors, etc.

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.

Sponsorship letter from the stock broker to whom I/we am/are affiliated and two references, including one from the banker as required are enclosed.

This is to certify that _____________________ is a sub-broker affiliated to ___________________ member-broker of this Exchange.

The application is recommended/not recommended for registration by SEBI.

__________________ Stock Exchange.

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 fit and proper person to be registered as a sub-broker.

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 and sponsor 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 and the decision of the authority will be final and will be binding on me/us.

I/We member/s of __________________ Exchange hereby agree to sponsor the above mentioned applicant.

Yours faithfully,

Signature of Member/s.

STG/mc

Ref. SE/4798

May 14, 1992

To

All the Presidents/Executive Directors of all the Stock Exchanges

As you would know, the Honorable Finance Minister met the Presidents of major stock exchanges on March 28, 1992 and in the meeting the Honorable Finance Minister advised them that they should immediately initiate necessary reforms in stock exchange practices and procedures specially in the following areas.:

1. Increasing corporate membership;

1. Uniform and longer trading hours (at least 3 hours) on all Stock Exchanges;

1. A shorter, uniform and synchronized settlement period on all Stock Exchanges;

1. Self-regulation by Stock Exchanges and effective inspection of the books and records of the brokers, coupled with quicker and effective resolution of investors complaints;

1. Arbitration should be faster, insider trading should be checked and price rigging and kerb deals effectively controlled.

The Honorable Finance Minister also desired that stock exchanges should furnish a progress report to SEBI in respect of the aforesaid items and in turn SEBI would submit a progress report on the same to the Honorable Finance Minister Sometime in June.

Hence, we request you to submit a report regarding progress achieved by your Stock Exchange in respect of the aforesaid items by May 29, 1992. This matter may kindly be considered as urgent.

Please acknowledge receipt.

Thanking you,

Yours faithfully,

sd/-

Our ref: SE/4480/92

May 29, 1992

To,

Presidents and Executive Directors

of the Stock Exchanges

Dear Sir,

You are aware that with a view to helping the investors, a new instrument namely "STOCKINVEST" has been introduced for enabling investors to subscribe to Public Issues. However, we have received reports that there is a feeling among the underwriters and brokers that the applications with "STOCKINVEST" may be discriminated in respect of chances of allotment compared to the other applications, as according to them. "STOCKINVEST" applications are to be sorted and tabulated separately.

Since the allotment of securities are made by the companies in consultation with the Stock Exchanges, we advise you to ensure that the "STOCKINVEST" applications have the same opportunity as the applications made through cheques, demand drafts and cash payments and leave no chance for any discriminatory treatment.

Please acknowledge the receipt of this letter.

Yours faithfully,

sd/-

May 29, 1992

To,

The Presidents/Executive Directors

of all Stock Exchanges

Dear Sir,

You would be aware about the recent revelations about the alleged involvement of a few member brokers of the stock exchanges in the reported unauthorised practices adopted in the market for Government Securities which in turn enabled them to influence trading in and prices of shares in the stock exchanges. In this connection you would recall that the stock exchange authorities are required to closely monitor the market and maintain a close watch on price movements in scrips and volume of business transacted therein, both in aggregate and individual brokerwise, so as to ensure that the market works in an orderly manner. This function of stock exchange authorities assumes greater importance in the context referred to above and especially when it was reported that a few groups of persons could raise the prices of certain scrips which were far our of alignment with their fundamentals and future prospects. The investors were tempted to enter into bargains at the higher levels and subsequently found themselves in quandry as the price levels at which they entered the market could not be maintained. The exchange authorities have however taken a limited view of their role and confined their management of the exchange to monitoring margins, payment and delivery. They have not looked into malpractices like price rigging and market manipulation.

In the light of above, the exchange authorities should initiate the inspection of the books of the member brokers who are associated with undue movements in prices of shares and exercise greater supervision on the trading on the floor of the exchange with a view to minimising the situations of price rigging and market manipulation. They should also call for the details from the brokers regarding names of clients and quantities purchased/sold by them and examine if there is an attempt to rig up the prices and/or to manipulate the market.

In case if there is an evidence to conclude that there is rigging and market manipulation, exemplary action should be implemented against member-brokers found to be indulging in such practices.

Please acknowledge the receipt of this letter.

Yours faithfully,

sd/-

ucd/kf

Our ref:SE/4569

June 17, 1992

To,

The President/Executive Directors

of all recognised Stock Exchanges

Dear Sir,

Please refer to the circular F.No.4/16/SE/19 dated August 19, 1991 on the above subject issued by the Stock Exchange Division, Ministry of Finance directing the Stock Exchanges to implement certain measures in the interest of long term growth of the Stock market and for ensuring investor protection. The measures suggested by the Government were: (i) the member-brokers should indicate to the clients execution price of transactions and the brokerage separately in the contract notes, (ii) The Exchanges should levy a minimum daily margin of 25% on gross outstanding positions of their members in respect of all shares in the specified list, (iii) ensure that all settlements take place strictly on schedule and (iv) the Governing bodies should be broad-based in a manner that the ratio of elected directors and outsiders is 50:50. You were also requested to submit the periodical reports on implementation of each of the above measures to the Ministry of Finance and SEBI. In order to enable us to furnish a consolidated report to the Government on progress made by the Stock Exchanges in implementation of the above measures, we shall appreciate it if you will please arrange to send to us a report indicating the steps taken by your Stock Exchange so far to implement the above measures. It may also be mentioned that the Government and Securities and Exchange Board of India are likely to take a serious view of the slow implementation of these directives of Government.

Besides, we have been receiving complaints from investors that the members of most of the Stock Exchanges-still continue to follow the old practice of showing execution price net of brokerage in case of sale and gross of brokerage in case of purchase transactions not withstanding the direction issued by the Government to show the execution price of transaction and the brokerage separately as far back as in August 1991. In this connection, we suggest that the Stock exchanges should carry out sample scrutiny of contracts issued by their member-brokers and incorporate the findings thereof in the progress report to be submitted to Securities and Exchange Board of India.

Please ensure that your report in this regard reaches us by June 30, 1992 positively.

Kindly acknowledge receipt of this letter.

Yours faithfully,

sd/-

STG/kf

Our ref:SE/4726

June 18, 1992

The Presidents/Executive Director

of all recognised Stock Exchanges

Dear Sir,

As you are aware, the Capital Issues (Control) Act, 1947, which controlled issue of capital by companies has been repealed by an ordinance promulgated by the President of India on May 29, 1992 and issue of capital and pricing of issues by the companies have since been released from the requirements of prior approval from the Controller of Capital Issues. Thereafter, with a view to ensure proper disclosure by companies and protect the interest of investors, SEBI has issued on June 11, 1992 certain guidelines which are to be observed by companies issuing capital. These guidelines and the clarifications issued thereof (Press Release dated June 17, 1992) are enclosed for your information and necessary action.

These guidelines will apply to all issues of capital made by companies hereafter. However, those companies holding consents from the controller of Capital Issues granted prior to the promulgation of the Ordinance may proceed with the issues on the terms and conditions contained therein, subject to the requirement that the guidelines now issued by SEBI would also apply to such issues to the extent they are not inconsistent with the terms of the CCI consents.

You are advised to ensure that the companies issuing capital and seeking enlistment of their securities at your Stock Exchange scrupulously adhere to the guidelines. For this purpose, amendments to the extent required should be made at the earliest in the bye-laws and regulations relating to the conditions of listing of securities at your Exchange. In this context, among others, your attention is invited especially to the following provisions of the Guidelines:

1. Not less than 20 percent of the equity should be offered to the public in case of new issues made either by the new company or by the existing closely held/private companies going to public

    

2. In case of public issues by the listed companies there should be disclosure of highs and lows of prices of their shares for the last 2 years.

In case of need for any clarification, you may please write to SEBI.

Please acknowledge receipt of this letter.

Yours faithfully,

sd/-

Ref. SE/5936

July 1, 1992

To the Presidents/Executive Directors

of all recognised Stock Exchanges

Dear Sir,

Please arrange to send a report on a daily basis to us covering the following information by telex/fax so as to reach us by 12 noon on the following day:-

1. Names of 10 scrips having maximum price variation in percentage terms and their volume of turnover in terms of number of shares on the date ________.

(No of Shares)

2. Index Variation (if compiled)

Previous day’s closing index :

Today’s closing index :

Variation :

C. Any other special development during the day

Please ensure immediate compliance to the above instructions as they are in the context of requirements of the ensuing Parliament session.

In addition, daily reports called for vide our circular No.SE/10452 dated September 09, 1991 may continue to be sent to us.

Please acknowledge receipt.

Yours faithfully,

sd/-

Our ref:SE/6088

July 7, 1992

To,

The Presidents/Executive Directors

of all recognised Stock Exchanges.

Dear Sir,

Please refer to our letter No.SE/3050 dated April 09, 1992 advising you, inter alia, to inform the PSUs which approach your Exchange for listing of their shares to send a set of disclosure documents to SEBI and to your Exchange, particularly the relevant information required in the abridged prospectus ("Memorandum" under Section 56(3) of the Companies Act, 1956). In this connection, we advise that you may please inform the PSUs who have already been granted in principle approval for listing of their shares at your Exchange or PSUs which approach you for listing of their shares in future, to provide the information in the enclosed format and submit the same to SEBI as well as Stock Exchange. This is in lieu of requirement prescribed earlier to submit the abridged prospectus ("Memorandum" under Section 56(3) of the Companies Act, 1956). The requisite information should be furnished by the PSUs to SEBI and the Stock Exchanges before their shares are listed by the Stock Exchanges and traded. Please ensure compliance to the above instructions and meanwhile acknowledge receipt of this letter.

Yours faithfully,

sd/-

1. Name

2. Address

1. Registered Office

    

2. Corporate Office

    

3. Factory/works etc.

3. Date of Incorporation

    

1. Nature of product (S)

and approach to Marketing

5. Licensed and installed Capacity

6. Listing at Stock Exchange

7. CAPITAL STRUCTURE

7.1 Authorised Share Capital

2. Issued Subscribed and Paid Up Capital

8. Records of Bonus Issues

    

1. No. of Shares Disinvested

    

2. Names of the Mutual Funds/Banks/FIIs

(giving the no. and percentage of issued

capital of the PSU shares held by each Fund)

11. Price per share at which the

Shares were disinvested

(if in different lots, state price

of acquisition for each lot)

1. Brief history

    

2. Main Objects and present business

    

3. Background of Chairman/Managing Director / Wholetime Director(s):

    

4. Names of Nominee Director (s) of

assisting institutions, if any,

on the Board of Directors.

5. Manpower/Personnel employed

13. Brief description of Plant and Machinery,

     

1. Brief description of Technology

    

2. Collaborators, if any,

    

3. Nature of assistance,

from Collaborators, if any,

17. Infrastructure facilities

17.1 Raw Materials,

17.2 Electricity

(last five years from

Audited Annual Accounts)

1. Gross Turnover

    

2. Gross Profit/Loss

    

3. Net Profit

    

4. Dividend Record

1. Reserve and Surplus

(In case of revaluation reserve,

the year of revaluation, value

and amount of revaluation and its

monetary effect on assets).

1. Contingent Liabilities

1. Bank/FIIs Borrowings

20.4 Fixed Deposits and

20.5 Preference Shares

21. Any material development after

the date of the latest balance sheet

and its impact on performance

and prospects of the Company.

22. Any change in accounting

policies during the last three years

and their effect on the profits and the

reserve of the company.

Particulars of default, if any,

23.1 In matters likely to affect operation

and finances of the Company

including disputed tax liabilities

23.2 Criminal prosecution launched against

the Company and the directors

for alleged offenses.

24. MANAGEMENT PERCEPTION OF THE RISK FACTORS

25. Any other matter which may be of

interest to the investing public

Place:

Date:

sd/- sd/-

Constituted Attorney Constituted Attorney

(Relevant PSU) (Relevant Mutual Fund,’

Investment Institution or Bank

in whose favour the PSU

shares have been disinvested)

Ref : SE/7026

July 24, 1992

To,

The Presidents/Executive Directors

of all recognised Stock Exchanges

Dear Sir,

In continuation of our letter no. SE/4726 dated June 18, 1992 forwarding the Guidelines for Disclosures and Investor Protection regarding issue of capital, we are enclosing two press releases dated June 18, 1992 and July 16, 1992 issued by SEBI providing further clarifications on the subject, for your information and necessary action.

Please acknowledge the receipt of this letter.

Yours faithfully,

sd/-

Encl : a/a

PMD/Cir.4730/92

June 18, 1992

To,

All Authorised Merchant Bankers

Dear Sirs,

Please refer to our Circular No.PMD/Cir.4545/92 dated June 11, 1992 forwarding therewith "Guidelines for Disclosure and Investor Protection". Pursuant to our issue of the aforesaid guidelines, we have received some queries which are clarified as under. The references to the sections are as per Sections in the original guidelines.

Preamble to the guidelines - The guidelines "not inconsistent" with the terms and conditions of the CCI consent.

If the company prefers to abide by the terms and conditions mentioned in the consent order already issued by the CCI, the same will hold good. Accordingly, if the company intends to retain 15% oversubscription, the same is permissible only if it has been noted as such by the CCI. In such cases, all conditions including pricing of CCI consent will apply.

1. First Issue of new companies

- Existing company mentioned in Section A (a) (para 2) is to be interpreted as existing private/unlisted closely held/listed companies.

- The issue price stated therein is applicable uniformly to all investors in new companies including promoters and the promoters contribution being subject to lock-in period of five years as already mentioned in Section "L" of the guidelines.

2. First issue by existing private/closely held companies.

- The provisions will not apply to rights issues of any amount by existing private companies and rights issues without right of renunciation of any amount by unlisted closely held companies.

- Three year track record [item B(i)] means three years record of which atleast two should be completed years of 12 months each and one should be not less than 6 months.

3. Public Issue by existing listed companies

- Companies wishing to enhance their foreign shareholding upto 51% or more as permissible under the relevant guidelines of Government/Reserve Bank of India can make issues at the price determined by the shareholders in a special resolution under Section 81(1)(A) of the Companies Act. This will also apply to issue of shares to foreign investors by closely held companies and also by other companies where there is no foreign shareholding at present.

4. Underwriting

- Underwriting should be only for issue to the public which will exclude reserved/preferential allotment to reserved categories. In other words, underwriting is mandatory only to the extent of net offer to the public.

- Minimum subscription clause is applicable for both public and rights issue with a right of renunciation.

7. New Financial Instruments

- In regard to new financial instruments, whether issued by way of rights or otherwise, the disclosure requirements shall be vetted by SEBI. The debt instruments having maturity beyond 18 months will require credit rating.

8. Reservation in Issues

- Reservation for employees shall mean "Regular/permanent employees and not casual/daily wage employees".

10. Minimum interval time between issues.

- Issue of bonus shares after 12 months of any public/rights issue is subject to Section M(o) of the guidelines.

- Capital issue should be made fully paid up within 12 months from date of issue except in cases which are subject to monitoring requirements under section I.

11. Employee Stock Option Schemes

- "New Issues" would mean first public issue by new companies as defined in Section "A". Limit of maximum 200 shares per employee will apply to all cases.

- The term "Promoters contribution" will mean contribution by promoters, directors, friends, relatives and associates. For the first issue, promoters’ contribution shall not be less than 25% or 20% of the total issue of equity capital as the case may be, with five year lock-in period.

- In respect of further issues, if there are no promoters, the "promoters contribution" will mean contribution by directors, friends, relatives, associates and contribution from them shall not be less than 25% or 20% of the total issue of equity capital as the case may be, with lock-in period of five years.

- In the case of FCDs, the intention is that over and above the proposed issue amount of FCDs, the promoters, directors, friends, relatives and associates should bring in by way of contribution to equity, amount equivalent to one third of the amount proposed to be issued as FCDs.

- Likewise in case of PCDs, one third amount of equity should be with reference to convertible portion of PCDs.

- Alternatively out of total issue of FCD or total issue of PCD, they can take promoters’ quota of 25% or 20% as the case may be at the time of issue, with the same conversion price as stipulated for public.

16. General

Letter of offer for rights issue containing disclosures will be vetted by SEBI as hitherto.

Yours faithfully,

sd/-

Our ref: SE/7041

July 24, 1992

To,

The Presidents / Executive Directors

of all the recognised Stock Exchanges

Dear Sir,

It is reported that some companies recently approached the Stock Exchanges to change the record dates which were fixed earlier in consultation with the Stock Exchanges. It should be noted in this connection that in accordance with the Guidelines for Disclosures and Investor Protection issued by the Securities and Exchange Board of India (SEBI), it is a pre-requisite for all the listed companies to get approval of SEBI for their letter of offer in case of rights issue and prospectus in case of public issue prior to the issue. Accordingly the approval of SEBI for the letter of offer for rights issue by a company must have been duly obtained by it before its approaching the stock exchanges for fixation of record date. The stock exchanges are advised to ensure the implementation of the above condition so as to obviate the possibility of any change in the terms of rights issue after the fixation of record date for rights issue.

Please acknowledge the receipt of this letter.

Yours faithfully,

sd/-

Ref.SE/7423

August 4,1992

To

The Presidents/Executive Directors

of all stock exchanges

Dear Sir,

As you are aware, the Central Government has delegated powers under the Sections 6, 9, 10, 17 and 21 of the Securities Contracts (Regulation) Act, 1956 to SEBI under Part II of the Schedule under Section 33 of the Securities and Exchange Board of India Act, 1992.

The Government has further issued a notification on July 30, 1992 directing that the powers under the sub-section (5) of Section 4 and Sections 7, 8, 11, 12 and 16 of the Securities Contracts (Regulation) Act, 1956, which are exercisable by the Central Government shall also be exercisable by Securities and Exchange Board of India (SEBI). A copy of the notification is enclosed for reference and information.

Please acknowledge the receipt of this letter.

Yours faithfully,

sd/-

21. C. DIKSHIT

Ref. SE/7566

August 6, 1992

To,

The Presidents/Executive Directors

of all Stock Exchanges.

Dear Sir,

You would be aware that the Ministry of Finance issued a directive to all stock exchanges in August 1991, instructing inter-alia that the transaction price and brokerage should be shown separately in the contract notes issued by stock brokers. On our follow up in the last month, the stock exchanges have reported to us that they have issued necessary directive to their member brokers. In this connection, please also refer to our letter no. SE/4569 dated 19.6.92, advising you to make a sample scrutiny of the books of your member brokers and report to us whether the aforesaid directive of the Government has been implemented by the member brokers. We have not received any response from your Exchange as yet. Hence you may arrange to inspect the contract notes of your member brokers on a sample basis for a period of the last 2- 4 weeks and send a report to us which should include the following details :

1. the date when the Exchange issued directive to the member brokers to show execution price and the brokerage separately in the contract notes.

2. the date when the bye-laws and regulations in this respect were amended.

3. after the inspection of records of the member brokers, the findings of the Exchange indicating whether the aforesaid directive of the Government has been implemented by brokers.

4. any action taken against the member brokers who have not followed the directive of the Government and the Exchange, and

5. the steps taken/proposed to be taken by the Exchange to ensure that the member brokers show transaction price and the brokerage separately in the contract notes.

Kindly treat the matter as important and arrange to send your report to us positively within a fortnight.

Yours faithfully,

sd/-

Ref. SE/9281

September 28, 1992

To

The Presidents and Executive Directors

of all stock exchanges.

Dear Sir,

Recently, a representation was made to SEBI to the effect that the eligibility criteria regarding multiple membership stipulated by the Stock Exchange Division of the Ministry of Finance, Government of India (vide their circular letter no. F.No.1/26/SE/91 dated August 12, 1991) should be suitably modified.

The Modification has been sought with regard to eligibility of a person, who has been a member of any stock exchange for a period of less than 5 years, to apply for membership in another exchange. It was proposed that such a person may be permitted to become member of another stock exchange if he agrees to relinquish the membership of the stock exchange of which he is presently a member.

The above proposal has been considered and it is clarified that any person, who is a member of one stock exchange but for a period less than 5 years, may apply for membership of another stock exchange on the condition that he shall before accepting the membership of the latter stock exchange relinquish the membership of the former stock exchange. The position may be made clear to the concerned person before he is considered for selection and suitable undertaking taken from him for the purpose.

Please acknowledge the receipt of this letter.

Yours faithfully,

sd/-

21. C. DIKSHIT

Ref. SE/10118

October 12, 1992

To,

The Presidents/Executive Directors

Ahmedabad, Bangalore, Bhubaneshwar, Calcutta, Coimbatore, Delhi, Gauhati, Hyderabad, Jaipur, Ludhiana, Mangalore, Magadh, Madras, Madhya Pradesh, Pune, Saurashtra-Kutch (Rajkot), Uttar Pradesh, Vadodara.

Dear Sir,

Please refer to letter no. 1/10/SE/90 dated September 13, 1991 from the Stock Exchange Division, Ministry of Finance, New Delhi. In this connection, we advise that the Securities and Exchange Board of India has approved that the Stock Exchanges may collect listing fees from the companies for the period of 5 years from 1992-93 to 1996-97 according to the revised schedule detailed below :

1. Initial Listing fee Rs. 7,500
2. Annual Listing fee

2. Above Rs.1 crore and upto Rs.5 crores Rs. 8,400
3. Above Rs.5 crore and upto Rs.10 crores Rs.14,000
1. Above Rs.10 crores and upto Rs.20 crores Rs.28,000
2. Above Rs.20 crores and upto Rs.50 crores Rs.42,000
3. Above Rs.50 crores Rs.70,000

Companies which have paid up capital of more than Rs.50 crores will pay additional listing fee of Rs.1,400 for every increase of Rs.5 crore or part thereof in the paid up share and/or debenture capital. In case, of annual listing fee, they will be reduced by 50% for the companies which are non-regional for the exchange.

The Exchange is directed to set aside atleast 20% of the listing fees for providing services to the investing public. The exchange is also directed to provide daily quotation, other publications, computerised services and other services to the members of the stock exchange at cost price. The exchange would contribute 5% of total listing fees to SEBI every year.

With the hike in listing fees the stock exchange is also advised to increase the annual fee payable by the members and badge-holders and fees for transfer of cards etc.

Please acknowledge the receipt of this letter.

Yours faithfully,

sd/-

21. C. DIKSHIT

To,

Ref : SE/10277

October 14, 1992

All the Presidents/Executive Director

of all stock exchanges

Dear Sir,

Please find enclosed a copy of the minutes of the meeting of SEBI and stock exchanges held on September 25, 1992. The action taken/proposed to be taken with a definite timetable on various points discussed in the meeting may be intimated to us in a fortnight.

Yours faithfully,

sd/-

Encl : a/a

A meeting of the Presidents and Executive Directors/Secretaries of the Stock Exchanges convened by SEBI was held at Bombay on September 25, 1992 to discuss mainly the following issues :-

1. capital adequacy norms for brokers

2. shortening of settlement cycles

3. uniform and longer trading hours

4. faster settlement of arbitration proceedings

5. infrastructural difficulties of stock exchanges and brokers

6. maintenance of books by members and inspection of their books by stock exchanges

7. timely redressal of investor grievances

8. revamping of governing boards and committees of stock exchanges

9. prevention of insider trading and price manipulation

10. working of defaults committee, etc.

The meeting was presided by Shri G V Ramakrishna, Chairman, SEBI. A list of participants who attended the meeting is given in Annexure I.

Shri G V Ramakrishna welcomed the representatives of stock exchanges. In his opening address he observed that Indian economy is in the process of transition from a controlled to a liberalised economy in which capital markets have a very vital role to play. The capital market is at the centre of developments taking place in the country. He stated that the SEBI Act, 1992 has been passed by the Parliament and the Control of Capital Issues Act, 1947 has been repealed. SEBI has been made responsible for the growth of the capital markets and for investor protection. Foreign investment institutions have been permitted to invest in Indian capital markets subject to certain guidelines. SEBI has undertaken registration of foreign investment institutions. As against less than Rs. 100 crores raised from the new issues in 1979-80, resources raised during the quarter April-June 1992 are Rs. 4,300 crores and the resources expected to be mobilised from the primary market during the year 1992-93 are expected to be around Rs. 15,000 crores. Besides, disinvestment of equity by public sector undertakings and trading in shares of such undertakings is going to contribute significantly to the trading activity at the stock exchanges. He envisaged bright prospects for the growth of the Indian capital markets. He observed that there are 21 stock exchanges in operation with about 15 million investors and equity cult has been growing very fast. However, stock exchanges have not introduced enough reforms and changes in procedures to keep pace with growth in number of investors and volume of business. He stated that protection of investors was not being given due attention by the stock exchanges. He stated that apart from duty towards investors and brokers, the governing councils of the stock exchanges have national responsibility to inspire investor confidence into working of stock exchanges. He stated that we are in a glass cage and the world is watching us. He, cautioned that foreign investment institutions will invest in India only when stock markets are efficient, transparent and conditions are conducive and compare favorably with other countries. We have to upgrade the capital markets upto international standards. With Indian capital markets becoming global, he emphasised there is all the more need for improvements in practices and procedures of stock exchanges. So far the progress in implementation of the reforms and Government directives by the stock exchanges has been slow and tardy.

SEBI is an apex regulatory body in the capital markets and, interalia has been entrusted with the responsibility of overseeing the working of the stock exchanges. SEBI and the stock exchanges have to work together. He emphasised the need of dialogue between stock exchanges and SEBI to discuss various issues.

SEBI Chairman observed that a recent international study has shown that self regulatory organisations like stock exchanges function responsibly only when they are supervised by a regulatory body. He further stated that India is ahead of many countries in the area of number of listed companies, market capitalisation and resource mobilisation. However, we are far behind in investor service, transparency and quickness in execution and settlement of deals etc. He then narrated the recent developments relating to announcement by the Government regarding establishment of a National Stock Exchange, establishment of OTC Exchange of India, where trading will be screen based, and also licensing of spot dealers (share shoppes) in securities. These, he mentioned, will provide competition to the existing stock exchanges. Business will move to better managed exchanges. Therefore, the business interest, also requires the stock exchanges to improve their functioning. He exhorted the stock exchanges to implement the various measures aimed at improving their working. Stock exchanges should act as responsible self-regulatory bodies which work in larger national interest.

Mr. G B Desai, President, Bombay Stock Exchange assured on behalf of all stock exchanges that they would not let down the Government and SEBI in implementation of reforms in the stock exchanges and they are well aware of their responsibility towards the country.

Mr. M R Mayya, Executive Director, Bombay Stock Exchange stated that they have not been able to introduce many reforms in the functioning of stock exchanges mainly because of lack of adequate infrastructure, telecom facilities, depository etc. Chairman, SEBI, while accepting the need of Government support for infrastructure emphasised that the stock exchanges should not mix the two points and must take action on the Government’s directives quickly. Thereafter the individual items listed on the agenda were taken up for discussion.

Shri C B Bhave, Head, Secondary Market Department, SEBI while introducing the first item on the agenda, viz., capital adequacy norms for members of stock exchanges, observed that the present system of reckoning capital of broking firms by way of security deposit, margin and value of card and office, etc. is inadequate. He observed that while running a business, the membership card has no real value. It is valuable only when business is closed and the card is to be sold. The business of the members, he observed, should relate to the deposit kept by him with the Exchange. He also observed that corporate membership is becoming a reality. This will facilitate observing of capital adequacy norms based on net capital with the firm which is difficult in the case of individuals or partnership firms with unlimited liability. He felt that it should be obligatory on the part of the member broker to report to the stock exchange when he reaches 80-85% of his limit of business. Then stock exchanges must put the account of such a member on watch. The deposit to be kept with the Exchange should be 75% in the form of cash and 25% in the form of securities with adequate margins. The representatives of the stock exchanges agreed that suitable capital adequacy norms having a direct bearing on the operations of a member to his net worth need to be worked out and the capital fixed for a member has to be deposited with the stock exchange in an escrow account. The collection of deposit from the brokers according to their volume of business would also remove the need of collecting daily margins from them which is a difficult process. Bombay Stock Exchange while supporting the concept of reporting by brokers to the stock exchange when they reach a specific limit of their business desired that the deposit to be maintained by the brokers may be 50% in cash and 50% in securities with suitable margin. There was a feeling that uniform capital adequacy norms for brokers of all stock exchanges may not be practical proposition as may stock exchanges do not have carry forward trading system. These stock exchanges need to have different capital adequacy norms for brokers. Vadodara Stock Exchange opined that the notional losses of the stock brokers on day to day basis due to fluctuations in share prices should also be taken into account for deciding capital adequacy norms. Summing up the discussions, SEBI Chairman Shri G V Ramakrishna observed that need for capital adequacy norms has been underscored. All suggestions have been noted and SEBI will prepare a paper on the subject and circulate the same to the stock exchanges for their comments before the proposals in this regard are implemented.

Introducing the next item on the agenda, viz., shorter settlement cycles, Shri Bhave of SEBI observed that longer settlement cycles result in unacceptable delays in receiving either securities or payment and this is highly unsatisfactory from the investor’s view point. He suggested that there is a need to have a trading cycle for `B’ group shares for all stock exchanges preferably of 5 days (Monday to Friday) and pay out should take place on the following Friday. In this connection, certain difficulties like large volumes, non-availability of depository facilities, dated transfer deeds, delay in clearing of cheques by banks etc. were cited by the Presidents of stock exchanges. They, however, agreed that trading cycle in non-specified securities at all the stock exchanges would be reduced from the present two weeks in vogue in certain stock exchanges to one week in all stock exchanges. It was stated that steps to reduce paper work relating to settlements need to be taken up urgently. In this connection it was agreed that setting up of depositories and removal of validity period for transfer deeds (by amending Sec 108 of Companies Act) needed urgent attention.

Shri G V Ramakrishna observed that while introducing weekly settlement for `B’ group shares, investors who wish to take delivery or give delivery of `A’ group scrips should not face delays. He felt that such investors should be given facility of proposed weekly settlement. He further stated that we should first introduce weekly settlement for `B’ group or non-specified shares. Later, we can consider whether `A’ group shares can be traded on a weekly settlement basis. In this connection, representatives of stock exchanges felt that studies to start futures and options in respect of shares in specified group should be initiated and measures to ensure that genuine investors dealing in shares in specified or `A’ group are not denied the benefit of shorter weekly settlement cycle are also taken. It was agreed that the stock exchanges need to introduce adequate computerisation to handle the settlement work. The stock exchanges agreed that steps to start weekly trading cycles would be taken in two months.

As regards the uniform and longer trading hours, the representatives of stock exchanges agreed that trading hours needed to be extended. It was accordingly, decided to have uniform trading hours from 12.00 noon to 3.00 pm in all the stock exchanges across the country barring OTC Exchange of India, where trading is screen based, which will have trading hours from 9.30 a.m. to 11.30 a.m. The Gauhati Stock Exchange, because of its geographical location, agreed to have trading hours from 12.30 pm to 3.30 pm.

As regards the faster settlement of arbitration proceedings and expeditious implementation of arbitration awards, it was agreed by the representatives of the stock exchanges that there is a need to expedite the arbitration proceedings to give speedy justice to the investors as well as brokers. In this connection, it was suggested that the arbitration panels should be widened by including the partners of members and retired judges, etc. For this the Bye-laws and Rules of the Exchanges will have to be amended. In this connection, SEBI Chairman advised the participants to amend their bye-laws and SEBI is prepared to consider granting expeditious approvals to such proposals received from stock exchanges. It was also agreed that the arbitration awards would be implemented by the stock exchanges expeditiously.

The SEBI Chairman, pointed out that the size of staff of stock brokers has not increased in proportion to growth in volume of their business. He suggested that support staff may be placed at a premises other than in the stock exchange. Bombay Stock Exchange expressed difficulties of shortage of space as a major portion of the stock exchange building is occupied by banks/institutions. Some of stock exchanges requested that the state governments should provide land to stock exchanges at a cheaper rate and telecommunication facilities should be provided to stock brokers on a priority basis. SEBI Chairman expressed the need of better project planning by stock exchanges and advised that there may be 3 types of standard pattern of stock exchanges with minimum facilities. The exchanges should work out cost, sources of revenue including funds to be raised from member brokers, etc.

Shri C B Bhave suggested a 2 tier system of inspection of books of stock brokers by the stock exchange authorities. While a detailed inspection may be carried out once in 4-5 years, each broker’s books should be inspected at least once in a year for ensuring compliance with certain basic requirements. The stock exchanges were also of the view that members should maintain proper books and documents and their inspection should be conducted on regular basis so that at least once a year every member of the exchange comes within the ambit of inspection. While discussing which type of books must be maintained by stock brokers, SEBI Chairman advised the stock exchanges to make a list of such books and submit to SEBI. He suggested that deterrent penalty should be imposed on brokers for violation of directives of the stock exchanges and for irregularities detected in inspection. He also advised the stock exchanges to report to SEBI if they find that auditor’s report about brokers’ books is not correct so that matter may be taken up with the Institute of Chartered Accountants of India.

SEBI Chairman emphasised the need of reorganising the investors’ grievance handling system of stock exchanges and that small brokers also should be given representation in these cells. The stock exchanges agreed that greater attention should be paid to redress the grievances of investors. In case of rejection of transfers by companies on account of signature differences, SEBI Chairman suggested that companies should accept the signatures as valid if attested and indemnified by the seller broker. The stock exchanges supported the suggestion. While discussing complaints against companies the stock exchanges suggested that they should have the power to fine the officers in default of such companies who delay the transfer of shares. It was also suggested that the companies having paid-up capital of Rs. 5 crores should have investor grievance cells. SEBI Chairman also cautioned the stock exchanges that there is a move on the part of companies to request the Government to increase the period of two months for transfer as provided in the Companies Act. The stock exchange presidents stated that they were of the opinion that the time limit of two months for transfer of securities as provided in the Companies Act should be brought down to one moth in conformity with listing agreement.

On the question of composition of the Governing Boards of the stock exchanges, Shri Ramakrishna clarified that the letter addressed by SEBI to all the stock exchanges was only a consultative paper and there was no intention to nationalise the stock exchanges. He also pointed out that most of the non-member directors will be drawn from the investors, professionals, etc. He stated further that SEBI had yet to receive response from some of the Exchanges and would take a view after considering responses from all stock exchanges.

There was an agreement that there should be specific laws to check insider trading. Regarding manipulation of stock prices, Mr Bhave of SEBI emphasised the need of implementation of bye-laws of stock exchanges. He said that because of manipulation of share prices :

1. genuine investors suffer as they buy shares at higher prices in the market ; and

2. the companies charge higher premium for public/rights issues

The stock exchanges agreed that insider trading and manipulation of share prices need to be tackled with seriousness.

SEBI Chairman said that the delay in declaring a member broker as a defaulter has a snowballing effect. Such cases should be dealt with at an early stage and internal procedures should be worked out by the stock exchanges in this respect. He further suggested that a period of six months to the defaulter member to clear his dues as provided in the bye-laws should be reduced. Contradictory views were expressed whether on auction of the membership card of a defaulter broker the surplus, if any, after meeting all the liabilities can be retained by the stock exchange or should be returned to the defaulter member. The president of Jaipur Stock Exchange stated that it would be fair to hand over the surplus to the broker so that the tendency to obtain a stay order against the implementation of the decision of the stock exchange would be reduced. It was agreed that the possibility of amending the bye-laws of stock exchange should be explored.

Another suggestion was to appoint a tribunal to decide inter market disputes. Bombay Stock Exchange agreed to provide background papers for establishment of the tribunal to decide on inter-market cases to SEBI, which would look into the issue.

1. It was agreed that the names of investors who cheat the stock brokers should be circulated suitably by stock exchanges amongst members and no broker should do any transaction with him.

2. The presidents felt that the minimum offer of 20% of the issued capital of a company to get its securities listed on the stock exchange needed to be raised to at least 40%, in the larger interest of widening the shareholder population in the country and also to minimize the scope for manipulation of prices. Chairman SEBI suggested that the important issue was availability of tradable stocks and the ways of ensuring such availability could be discussed further. He further said that there are many companies in which the holding with the public is not more than 20%.

3. The presidents also felt that Companies Act, 1956, permitting companies to send abridged balance sheets to the shareholders needed to be amended forthwith, preferably by way of an Ordinance, to ensure that all shareholders were supplied with the full copy of the balance sheets.

At the end, Chairman SEBI thanked the stock exchanges for their suggestions on various issues. He stressed that the stock exchanges should take action quickly on the various points discussed in the meeting. The stock exchanges expressed that there was unanimity of opinion on the issues between SEBI and the exchanges and desired that such meetings should be conducted on half-yearly basis.

-----------------------------------------------------------------------------------------------------------

ORGANISATION DESIGNATION NAME

Securities & Exchange Chairman G. V. Ramakrishna

Board of India

Head-SMD-I U.C. Dixit

Head-SMD-II C.B. Bhave

Division-Chief R.C. Gupta

Division-Chief Rajiv Nabar

Officer S.T. Gerela

Officer P.K. Nagpal

Officer C.M. Tilak

Ministry of Finance Director (Inv) Sudhirkumar

1. Bombay President G.B. Desai

Exe. Director M. R. Mayya

Vice-President K.R. Choksey

Hon. Treasurer R.N. Shah

Director V.K. Shah

Director Arvind C Dalal

Secretary A.J. Shah

Manager A.A. Tirodkar

2. Calcutta President Ajit Day

Director Sunil Kedia

3. Delhi President Prem Chand Jain

Exe. Director R.K. Pandey

4. Ahmedabad President N.L. Parikh

Exe.Director M.L. Soneji

5. Madras President V. Ganesan

Exe.Director S. Ramanathan

Director

6. Hyderabad President N. Rama Rao

Vice President U.C. Shrimal

7. Madhya Pradesh President N.K. Jain

(Indore)

Secretary A.S. Jayakumar

8. Bangalore President R. Jagdishkumar

Vice President S.C. Patel

Secretary N. Raghavendra Rao

9. Cochin President Omana Abraham

10. Uttar Pradesh President P.K. Jain

(Kanpur)

Secretary G.L. Sharma

11. Pune President A.M. Shah

Secretary P.L. Kadlaskar

12. Ludhiana President V.N. Dhiri

Exe.Director A. Draviam

13. Gauhati President D.N. Barua

14. Mangalore President J. Kamath

Director G. Colaco

15. Magadh (Patna) Vice-President J. Pandey

Secretary A. Sinha

16. Jaipur President K. L. Jain

Exe.Director J.N. Dhankar

17. Saurashtra-Kutch President S.K. Bhanderi

(Rajkot)

18. Vadodara President Subhash B. Dalal

Exec. Director M.K. Khanna

19. Coimbatore President K.G. Balakrishnan

Vice-President N. Shankaran

20. OTCEI Chief Executive R. Ravimohan

Executive S. Nagrajan

SMD-II/REGN/38/92

November 7, 1992

The Presidents/Executive Directors

of Madras, Pune, Jaipur, Bangalore, Hyderabad,

Indore, Bombay, Kanpur and Cochin Stock Exchanges.

Sir,

1. We would like to inform you that we are in the process of finalisation of the granting of Registration to stock-brokers. In this regard, we request you to collect the registration fees from each of the member brokers of your exchange for Financial Year 1992-93. The registration fees for financial year 1992-93 as per SEBI (Stock-brokers and Sub-brokers) Regulations, 1992 is payable by each stock broker in the manner set out below :

1. Where the annual turnover does not exceed rupees one crore during the financial year 1991-92 a sum of rupees five thousand is payable for financial year 1992-93 or,

1. Where the annual turnover of the stock-broker exceeds rupees one crore during the financial year 1991-92 a sum of rupees five thousand plus one hundredth of one percent of the turnover in excess of rupees one crore is payable for financial year 1992-93.

2. As per the explanation provided in SEBI (Stock-brokers and Sub-brokers) Regulations, 1992 "annual turnover" means the aggregate of the sale and purchase or dealing in securities during any financial year.

3. The fees shall be paid by a cheque or draft in favour of "The Securities and Exchange Board of India" at Bombay.

4. You have already forwarded to us the broker-wise turnover figures for 1991-92 vide your letter bearing ref. No. ………………………….. dated ………………. The fees based on these figures may be collected and forwarded to SEBI within one month i.e. by December 8, 1992 to facilitate issue of registration certificates to brokers.

5. You are also requested to separately check the authenticity of the figures mentioned in your letter by obtaining an audit certificate from the member-brokers and forward the same to SEBI. In case, the actual turnover of any broker is found to be higher than the one mentioned in your letter, you are requested to collect the additional fees, as well, as per the turnover certified.

It may be noted that the collection of fees based on figures supplied by you should not be withheld or postpone for the certification mentioned in para 5 above.

Yours faithfully,

sd/-

SMD-II(B)/13/11464/92

November 16, 1992

The President/Executive Director

Bombay, Ahmedabad, Calcutta, Madras,

Delhi, Hyderabad, Madhya Pradesh, Bangalore,

Cochin, Uttar Pradesh, Pune, Saurashtra-Kutch,

Ludhiana, Gauhati, Mangalore, Magadh, Jaipur,

Bhubaneshwar, Vadodara, Coimbatore, Meerut Stock

Exchanges and OTC Exchange of India.

Dear Sir,

Please find enclosed one copy of the Securities and Exchange Board of India (Stock Brokers & Sub-Brokers) Rules, 1992 and the Securities and Exchange Board of India (Stock Brokers & Sub-Brokers) Regulations, 1992. Kindly acknowledge the receipt of this letter.

Yours faithfully,

sd/-

encl : as above

Head

Secondary Market Department

November 19, 1992

SMD-II/11557/92

To the President/Executives of

All the Stock Exchanges

Dear Sir,

We are enclosing herewith a copy of the notification issued by the Government of India on November 13, 1992 amending the Securities Contract (Regulation) Rules, 1957.

The amendment facilitates the entry of companies as defined in the Companies Act, 1956, as members to the stock exchanges subject to the conditions mentioned therein. It is requested that applications from corporate members may be called for by issuing a suitable notice in the press. The financial requirement and norms required to be specified by the Securities and Exchange Board of India under the provision of Rule 8 sub-rule 4(a) (ii) will be communicated to you shortly.

Yours faithfully,

sd/-

encl : a/a

New Delhi, the 13^th November 1992

G.S.R. - Whereas certain draft rules further to amend the Securities Contracts (Regulation) Rules, 1957, were published as required by sub-section (1) OF SECTION 30 OF THE Securities Contracts (Regulation) Act, 1956 (42 of 1956) in the Gazette of India, Extra ordinary Part II Section 3, Sub Section (i), dated the 2^nd June, 1992 under the Notification of the Government of India in the Ministry of Finance (Department of Economic Affairs) No. G.S.R. 576 (E) dated the 2^nd June, 1992 inviting objections and suggestions from all persons likely to be affected thereby before the expiry of a period of forty-five days from the date on which the copies of the Gazette of India in which the said Notification was published where made available to the Public;

And whereas the copies of the said Gazette were made available to the public on 27^th June 1992;

And whereas the objections and suggestions received from the public on the said draft have been considered by the Central Government;

Now, therefore, in exercise of the powers conferred by sub-section (1) of section 30 of the said Act, the Central Government hereby makes the following rules further to amend the Securities Contracts (Regulation) Rules, 1957 namely :-

1. (1) These rules may be called the Securities Contracts (Regulation) Amendment Rules, 1992.

2. They shall come into force on the date of their publication in the Official Gazette.

2. In rule 8 of the Securities Contracts (Regulation) Rules, 1957 after the existing sub-rule (4), the following sub-rule shall be inserted, namely :-

1. Such company is formed in compliance with the provisions of section 12 of the said Act;

2. such company undertakes to comply with such financial requirements and norms as may be specified by the Securities and Exchange Board of India for the registration of such company under sub-section (1) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

3. majority of the directors of such company are shareholders of the company and not less than 40% of the paid-up equity capital of the company is held by these directors themselves or by the body corporate appointing them as directors on the board of such company;

4. the directors of the company are not disqualified for being members of a stock exchange under clause (1) (except sub-clause (f) thereof) or clause (3) (except sub-clause (f) thereof) and the Directors of the company had not held the offices of the Directors in any company which had been a member of the stock exchange and had been declared defaulter or expelled by the stock exchange; and

5. not less than two directors of the company are persons who possess a minimum two years’ experience :

1. in dealing in securities; or

2. as portfolio managers; or

3. as investment consultants."

(Y. VENUGOPAL REDDY)

JOINT SECRETARY TO THE GOVERNMENT OF INDIA

F. NO. 1/81/SE/90

DATED : 13^TH NOVEMBER, 1992

The Manager,

Government of India Press

Mayapuri

New Delhi.

Under the existing rule 8 of the Securities contracts (Regulation) Rules 1957, a company formed in compliance with the provisions of Section 322 of the Companies Act 1956 is eligible to become a member of a Stock Exchange. The rule also requires that a majority of the directors of such a company are its shareholders and also members of a Stock Exchange and that the directors of the company, who are members of a Stock Exchange, have unlimited liability in the company. Experience has shown that the existing rule is not conducive to the growth of corporate membership in Stock Exchanges. Accordingly, Government have issued a Notification on 2^nd June, 1992 containing draft of certain rules further to amend the Securities Contracts (Regulation)Rules 1957.

2. After considering the objections or suggestions on the draft rules received from the public and Stock Exchanges in consultation with the Securities and Exchange Board of India, Government have issued a Notification in the gazette of India on 13^th November, 1992 amending Rule 8 of the Securities Contract (Regulation) Rules 1957 in order to provide at a company formed in compliance with the provisions of Section 12 of the Companies Act 1956 will also be eligible to become a member of a Stock Exchange subject to certain conditions. Some of the important conditions are as follows :-

1. such a company undertakes to comply with such financial requirements and norms as may be specified by the Securities and Exchange Board of India for the registration of such company under sub-section (1) of section 12 of the Securities and Exchange Board of India, Act, 1992;

2. majority of the directors of such a company are shareholders of the company and not less than 40% of the paid-up equity capital of the company is held by these directors themselves or by the body corporate appointing them as directors on the board of such company;

1. in dealing in securities; or

2. as portfolio managers; or

3. as investment consultants."

3. The amendment referr