Subject: Penalty charges for not taking Prior Approval of Exchange/SEBI as per the Rule 4C of SEBI (Stock Broker & Sub-Broker) Rule, 1992 for any change in status and constitution.

As you are aware, as per the Rule 4C of SEBI (Stock Broker & Sub-Broker) Rule, 1992 all Members/Dealers are required to take prior approval of the Exchange/SEBI for any change in status and constitution. However, we notice that we have been receiving some proposals involving change in status/constitution after such changes are made. We would like to draw your attention that such changes without prior approval of the Exchange/SEBI is in violation of the SEBI (Stock Broker & Sub-Broker) Rule(s), 1992 and request you to adhere to the provisions of the Rules.

It is now decided that the penalty charge will be levied if the Member/Dealer fails to take prior approval. The penalties are indicated below:

S. No.	Type of Change in Status and Constitution	*Penalty Amount (Rs.)**
1	Change in directors*	1,000/-
2	Change in designated directors	2,000/-
3	Change in shareholding (without change in controlling interest in the company)	2,000/-
4	Change in controlling interest of the company	5,000/-
5	Conversion from one form to another (proprietorship, partnership and corporate)	5,000/-
6	Transfer by way of sale or otherwise	5,000/-
7	Consolidation/merger/amalgamation of Dealers/Members	5,000/-

* not in case of resignation of director

** Penalty charge is in addition to the Processing fees/ Transfer charges charged presently

Please note that this Penalty is exclusive of any Penalty which may be levied by any other Regulatory Authority.

All Members/Dealers are requested to take note of the same.

Thanking you.

Yours faithfully,

Ajay Singhvi

Asst. Vice President

[ Eligibility Criteria ] [ Transferability ] [ Member Dealer List ] [ Fee Structure ] [ Circulars ]