Usage of software by the brokers/sub-brokers - SEBI - SEBI/MRD/Policy/SE/15864/2003

Circulars Deputy General Manager Market Regulation Department Email: [email protected] Tel : 22845355 Fax: 22845761 SEBI/MRD/Policy/SE/15864/2003 August 21, 2003 The Executive Directors/ Managing Directors/Administrators of all the Stock Exchanges Dear Sir/Madam, Sub: Usage of software by the brokers/sub-brokers 1. Please refer to the deliberations during the meeting held on August 5, 2003, when apprehensions were raised stating, inter-alia, that some of the brokers/sub-brokers are using un-authorised software which is not in the interest of the securities market. 2. In this regard, you are advised to obtain an undertaking in the form of an affidavit (in the format similar to the one enclosed) from the members of the exchange to the effect that the members as well as their sub-brokers (including subsidiary companies formed by the exchanges) are using only the authorized software. 3. You are also advised to confirm compliance by September 12, 2003. Yours faithfully, V S SUNDARESAN Encl: Format of the affidavit-cum-undertaking AFFIDAVIT-CUM- UNDERTAKING I, _ son of aged ____, (name of the company / firm), a member of the National Stock NSEIL of India Limited (hereinafter referred to as NSEIL) solemnly declare, affirm, state and confirm on oath as follows:- That M/s has been granted approval by NSEIL to adopt CTCL facility using the software developed in-house or by a vendor approved by the NSEIL and no modification of any part of the software has been / will be effected without prior approval of the NSEIL. M/s has not provided and will not provide in future directly or indirectly any view only determining or trading terminal through CTCL or otherwise, without complying with the NSEIL s Circulars No.282 (download reference No.NSE/MEM/3574) dated 29th August, 2002, No.292 (download reference No.NSE/MEM/3635) dated 25th September, 2002, No.309 (download reference No.NSE/MEM/3740) dated 13th November, 2002, and No.311 (download reference No.NSE/MEM/3758) dated 26th November, 2002, in respect of guidelines for location of CTCL terminals and usage thereof, submission of details of CTCL terminals and granting CTCL terminals by the Trading Members. None of the persons to whom we have provided CTCL terminals in compliance with the aforesaid circulars, has in turn, provided any terminal to any other person / office / premises / address in violation of the aforesaid circulars. I/We also will ensure that in future the CTCL terminals will not be provided to any person etc., in violation of the aforesaid circulars. All the CTCL terminals are installed at the same address and that the approved person is operating the respective CTCL terminal as declared in our submission of details of CTCL terminals to the NSEIL in response to the NSEIL s Circulars No.282 (download reference No.NSE/MEM/3574) dated 29th August, 2002, No.292 (download reference No.NSE/MEM/3635) dated 25th September, 2002 and No.311(download reference No.NSE/MEM/3758) dated 26th November, 2002. I/We will also ensure that the said circulars and circulars that may be issued by the Exchange from time to time in this regard are not violated in any manner. M/s ..will take all necessary steps to ensure that branches and their sub-brokers have not provided extension of any terminal connected through VSAT/leased line with the NSEIL by means of any connectivity, viz. dial-up/ leased line/ISDN/ wireless media / otherwise to at the same address as declared in our application to the NSEIL for providing VSAT/ leased line, in compliance with Regulation 2.1.2 of Part A of the Capital Market Regulations of the NSEIL. I/We also undertake and assure that in future our branches and sub-brokers will not provide extension of any terminal contrary to the contents of our application to NSEIL. M/s their branches and brokers do execute all orders received from constituents and any other persons, in their respective names/ client codes and none of the orders received from constituents is executed as its own under PRO code and/ or under other client codes. M/s their branches and their sub-brokers do place all orders received from constituents as per the quantity and price indicated by the constituents, on the trading system of the NSEIL and issue contract notes or purchase. Sale notes for the exact quantities for which and at the same prices at which the trades are executed on the NSEIL, except for contract notes issued with weighted average price in case of multiple trades resulting from single order as provided in the NSEIL s circular No.NSE/CMO/14/99 (download reference No.NSE/CMT/1025) dated 15th June, 1999 and also settle the transactions only for those quantities and at those prices. All the constituents to whom trading terminals have been provided by us, either directly or through CTCL, transact only for themselves and not for anybody else and they are not dealing as unregistered intermediaries. VERIFICATION I solemnly affirm that all the contents of the aforesaid affidavit are true and correct to the best of knowledge and belief and I have not concealed any material facts. Place: Date: Deponent