SEBI
circular no. SMD/SED/Cir/93/22570 dated October 21, 1993, prescribed
an absolute base minimum capital for various exchanges. The
requirements of the base minimum capital were revised and enhanced
vide SEBI circular no. SMD/SED/RCG/270/96 dated January 19, 1996
wherein the requirement of the base minimum capital was doubled.
2.
SEBI has
received representations from stock exchanges with a request for
refund/withdrawal of the base minimum capital in view of the
insignificant volumes at the exchanges.
3.
The issue
has been examined and it has been decided to review the capital
requirements as prescribed in our circulars no. SMD/SED/Cir/93/22570
dated October 21, 1993 and SMD/SED/RCG/270/96 dated January 19,
1996, as follows.
4.
The
exchanges having average daily turnover of less than Rs.1 crore for
the past three consecutive months from the date of this circular may
maintain the BMC at Rs 1 lakh. Besides, the exchanges which would
have the average daily turnover less than Rs.1 crore for any three
consecutive months after the date of this circular would also be
eligible to maintain the BMC at Rs. 1 lakh. The excess of the BMC
over Rs 1 lakh may be refunded to the member subject to the
following conditions : a.
The member has
been inactive at the stock exchange for the past 12 months, i.e. he
has not carried out any transaction on that stock exchange during
the past 12 months.
b.
There are
no investor complaints pending against the member.
c.
There are
no arbitration cases pending against the member.
d.
The
exchange shall retain/deduct/debit from the BMC to be refunded, the
amount of any complaints/claims of the investors against the member
and for dues crystallized and contingent to the exchange/SEBI
arising out of pending arbitration cases, appealed arbitration
awards, administrative expenses, SEBI turnover fees, e.t.c.
e.
The
exchange shall ensure that the member has paid the SEBI turnover
fees and has obtained a No-Objection Certificate (NoC) from SEBI in
this regard.
5.
However,
if the average daily turnover of the exchange exceeds the prescribed
level of Rs.1 crore for a period of one month at any time after the
date of this circular, the exchange shall enhance the requirement of
the BMC of the members back to the level stipulated in SEBI Circular
No. SMD/SED/RCG/270/96 dated January 19, 1996 and shall obtain
undertaking to this effect from the members.
6.
The
undersigned has been authorised to direct the stock exchanges
a.
to
take immediate steps to make necessary amendments to the relevant
bye-laws, rules and regulations for the implementation of the above
decision,
b.
to bring
the provisions of this circular to the notice of the member
brokers/clearing members of the Exchange and also to disseminate the
same on the website,
c.
to
communicate to SEBI, the status of the implementation of the
provisions of this circular in Section II, item no. 13 of the
Monthly Development Report for the month of May 2003.
7.
This
circular is being issued in exercise of powers conferred by section
11 (1) of the Securities and Exchange Board of India Act, 1992, read
with section 10 of the Securities Contracts(regulation) Act 1956, to
protect the interests of investors in securities and to promote the
development of, and to regulate the securities market.
8.
The
provisions of this circular are applicable with immediate effect.
