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OTC EXCHANGE OF INDIA

 

Ref No :1353/2003/CP/MDD/0639

June 30, 2003

Dear Member/Dealers,


Sub : Refund of Base Minimum Capital.

SEBI vide their circular SEBI/SMD/SE/Cir-24/2003/18/06 dated June 18, 2003 has issued the following circular. The SEBI circular reads as follows :

Quote

  1. 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.

 

  1. SEBI has received representations from Stock Exchanges with request for refund/withdrawal of the Base Minimum Capital in view of the insignificant volumes at the Exchanges.

 

  1. 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 :

 

  1. 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 :

 

    1. 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.
    2. There are no investor complaints pending against the member.
    3. There are no arbitration cases pending against the member
    4. 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 the dues crystallized and contingent to the Exchange/ SEBI arising out of pending arbitration cases, appealed arbitration awards, administrative expences, SEBI yurnover fees etc.
    1. 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.           This circular is being issues 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 the investors in securities and to promote the development of, and to regulate the securities market.

 

7.           The provisions of this circular are applicable with immediate effect.

 Unquote.

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

 

Thanking you,

 Yours faithfully,

 

Ajay C Singhvi

Asst. Vice President

 

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