Regulation 17 - To maintain proper books of account, records, etc. - Securities and Exchange Board of India (Stock Brokers) Regulations, 1992

CHAPTER IV GENERAL OBLIGATIONS AND RESPONSIBILITIES To maintain proper books of account, records, etc. 17. (1) Every Stock Broker shall keep and maintain the following books of account, records and documents, namely:- (a) Register of transactions (Sauda Book); (b) Clients ledger; (c) General ledger; (d) Journals; (e) Cash book; (f) Bank pass book; 1 [(g) Documents register containing, inter alia, particulars of securities received and delivered in physical form and the statement of account and other records relating to receipt and delivery of securities provided by the depository participants in respect of dematerialized securities;] (h) Member s contract books showing details of all contracts entered into by him with other members of the same exchange or counterfoils or duplicates of memos of confirmation issued to such other members; (i) Counterfoils or duplicates of contract notes issued to clients; (j) Written consent of clients in respect of contracts entered into as principals; (k) Margin deposit book; (l) 4 [ **** ] (m) 4 [ **** ] 2 [(n) Client account opening form in the format as may be specified by the Board.] 5 [ (1A) A stock broker in the Execution Only Platforms segment, shall keep and maintain the books of account, records and documents as may be specified by the Board from time to time. ] (2) Every stock broker shall intimate to the Board the place where the books of account, records and documents are maintained. (3) Without prejudice to sub-regulation (1), every stock broker shall, after the close of each accounting period furnish to the Board if so required as soon as possible but not later than six months from the close of the said period a copy of the audited balance sheet and profit and loss account as at the end of the said accounting period: Provided that, if it is not possible to furnish the above documents within the time specified, the Stock Broker shall keep the Board informed of the same together with the reasons for the delay and the period of time by which such documents would be furnished. 3 [ (4) (1) Subject to the provisions of any other law, every Stock Broker acting as an underwriter shall keep and maintain the following books of account and documents, namely: - (a) In relation to an underwriter being a body corporate- (i) a copy of the balance sheet and profit and loss account as at the end of each accounting period; (ii) a copy of the auditor s report on the accounts for that period; (b) In relation to an underwriter not being a body corporate- (i) records in respect of all sums of money received and expended by them and the matters in respect of which the receipt and expenditure take place; and (ii) their assets and liabilities. (2) Every Stock Broker acting as an underwriter shall also maintain the following records with respect to- a) details of all agreements b) total amount of securities of each body corporate subscribed to in pursuance of an agreement c) such other records as may be specified by the Board for underwriting. (5) Agreement with clients Every stock broker acting as an underwriter shall enter into an agreement with each body corporate on whose behalf it is acting as underwriter and the said agreement shall, amongst other things, provide for the following, namely: - a) the period for which the agreement shall be in force; b) the allocation of duties and responsibilities between the underwriter and the client c) the amount of underwriting obligations; d) the period, within which the underwriter has to subscribe to the issue after being intimated by or on behalf of such body corporate; e) the amount of commission or brokerage payable to the underwriter; f) details of arrangements, if any, made by the underwriter for fulfilling the underwriting obligations. (6) General responsibilities of a Stock Broker as an underwriter a) Every Stock Broker acting as an underwriter shall not derive any direct or indirect benefit from underwriting the issue other than the commission or brokerage payable under an agreement for underwriting. b) The total underwriting obligations under all the agreements shall not exceed twenty times of the net worth. c) Every Stock Broker acting as an underwriter, in the event of being called upon to subscribe for securities of a body corporate pursuant to an agreement shall subscribe to such securities within 45 days of the receipt of such intimation from such body corporate. ] ************* NOTES:- 1 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Amendment) Regulations, 2003, w.e.f. 23-09-2003. Prior to substitution, it read as under: Documents register should include particulars of shares and securities received and delivered 2 Substituted by the SEBI (Stock Brokers and Sub-brokers) (Second Amdt.) Regulations, 2011, w.e.f. 17-08-2011. Prior to the substation, it read as under: An agreement with the sub-broker and with the client of the sub-broker to establish privity of contract between the stock broker and the client of the sub-broker. 3. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/14 dated 30-03-2021 4. Omitted vide Notification No. SEBI/LAD-NRO/GN/2018/27 dated 30-07-2018 w.e.f. 01-04-2019 before it was read as (l) Registers of accounts of sub-brokers; (m) An agreement with a sub-broker specifying the scope of authority, and responsibilities of the Stock Broker and such Sub-broker; 5. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/116 dated 17-01-2023