OTC EXCHANGE OF INDIA

CIRCULAR

 

Circular No. OTC/NSCC-OPS/065                                                 

 Date: 15^th Sept, 2003

 To

Members/Dealers/Custodians

  

Sub: Mode of payment and delivery

 SEBI has issued a circular no. SEBI/MRD/SE/Cir- 33/2003/27/08 of 27/08/2003 regarding cash transactions between stock brokers and their constituents, the relevant contents of which are given below:

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 1.  Please refer to SEBI circular No.SMD/SED/CIR/93/23321 and letter No. SMD-1/23341 dated November 18, 1993 regarding regulation of transactions between clients and brokers. 

2.  It is reiterated that brokers and sub-brokers should not accept cash from the client whether against obligations or as margin for purchase of securities and / or give cash against sale of securities to the clients. 

3.  All payments shall be received / made by the brokers from / to the clients strictly by account payee crossed cheques / demand drafts or by way of direct credit into the bank account through EFT, or any other mode allowed by RBI. The brokers shall accept cheques drawn only by the clients and also issue cheques in favour of the clients only, for their transactions. However, in exceptional circumstances the broker or sub-broker may receive the amount in cash, to the extent not in violation of the Income Tax requirement as may be in force from time to time.

4.       Similarly in the case of securities also giving / taking delivery of securities in “demat mode” should be directly to / from the “beneficiary accounts” of the clients except delivery of securities to a recognized entity under the approved scheme of the stock exchange and / or SEBI.

Unquote 

All Members/Dealers are advised to take note of the above and also to bring the contents of this Circular to the notice of their registered sub-brokers and constituents, and to ensure strict adherence to the same.  Members/Dealers are also informed that any violation of the same will also be construed as violation of the Byelaws, Rules and Regulations of the Exchange, thereby entailing appropriate disciplinary action by the Exchange.

 

Yours faithfully,

For OTC Exchange of India

 

 

R.Anand

Asst. Vice President