Order under section 4B (6) read with section 4B (7) of the Securities Contracts (Regulation) Act, 1956 in the matter of the Gauhati Stock Exchange Limited (Corporatisation and Demutualisation) Scheme, 2005. - S.O. No.1204(E) - SEBI/MRD/48112/2005 - SEBI

SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 29th August, 2005 SECURITIES AND EXCHANGE BOARD OF INDIA, MUMBAI S. O. 1204 (E). 1.0 The Gauhati Stock Exchange Limited (hereinafter referred to as the GSE ), registered under the Companies Act, 1956 as a company limited by guarantee, is a recognised stock exchange having its principal place of business at Saraf Building Annexe, A.T. Road, Gauhati 781 001. It is required to be corporatised and demutualised in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as the SCRA ). 2.0 GSE, vide its letter dated February 17, 2005 submitted a scheme for its corporatisation and demutualisation for approval to the Securities and Exchange Board of India (hereinafter referred to as the SEBI ) in terms of sub-section (1) of section 4B of the SCRA. SEBI vide its letter dated May 25, 2005 advised GSE to submit a revised scheme taking into account those provisions of the BSE (Corporatisation and Demutualisation) Scheme, 2005, which may be relevant and applicable to GSE. 3.0 Thereafter, GSE, vide its letter dated June 13, 2005 submitted a revised scheme after taking into account the provisions of the BSE scheme. SEBI made enquiries and obtained information from GSE through a meeting on July 1, 2005. Based on the discussions during the said meeting, GSE desired to resubmit the scheme. 4.0 Accordingly, GSE, vide its letter dated July 11, 2005 submitted a further revised scheme (hereinafter referred to as the Scheme ) for its corporatisation and demutualisation to SEBI for approval in accordance with the provisions of the SCRA. 5.0 The Scheme, inter alia, provides for the re-registration of GSE as a company limited by shares, segregation of ownership and management from the trading rights of the members, restriction on voting rights of shareholders who are also trading members, composition of the Governing Board etc. in accordance with the provisions of Section 4B (6) of the SCRA, utilisation of assets and reserves and other matters required for the purpose of and in connection with the corporatisation and demutualisation of GSE. 6.0 SEBI, having considered the Scheme and on being satisfied that it would be in the interest of the trade and also in the public interest, hereby approves the Scheme with minor modifications. The approved Scheme is enclosed as Annexure- A. 7.0 GSE shall ensure compliance with the Scheme within the time as specified in the Scheme and shall not do anything contrary to the provisions of Scheme and submit compliance report to SEBI in the manner as may be specified by SEBI. 8.0 SEBI reserves the right to amend, alter or modify the Scheme in the interest of the trade and in the public interest and in furtherance of the objectives of the corporatisation and demutualisation of the stock exchange. 9.0 The Scheme shall come into effect on the day of its publication in the Official Gazette. [F. No. SEBI/MRD/48112/2005] M. DAMODARAN, Chairman Encl: Annexure A Annexure - A THE GAUHATI STOCK EXCHANGE LIMITED (CORPORATISATION AND DEMUTUALISATION) SCHEME, 2005 1. Title and Commencement 1.1 This Scheme shall be called The Gauhati Stock Exchange Limited (Corporatisation and Demutualisation) Scheme, 2005 (hereinafter referred to as this Scheme ). 1.2 This Scheme shall have effect on its publication under sub-section (4) of Section 4B of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as SCRA ). 1.3 The Gauhati Stock Exchange Limited (herein after referred to as GSE ) shall be corporatised and demutualised in accordance with this Scheme on and from the Appointed Date as may be notified by the Securities and Exchange Board of India (hereinafter referred to as SEBI ) in respect of GSE under Section 4A of the SCRA: Provided that the activities specified in the respective clauses of this Scheme shall be implemented as per the time schedule specified in those clauses. 2. Definitions In this Scheme, unless the context otherwise requires, - 2.1 Due Date means the date, as may be determined by the Council of Management of GSE, which shall not be later than 3 months from the date of publication of the order under sub-section (7) of section 4B of the SCRA. 2.2 Gauhati Stock Exchange Limited (GSE) means the company limited by guarantee registered under the Companies Act, 1956, having its principal place of business at Saraf Building Annexe, A.T. Road, Gauhati 781 001 and recognised as a stock exchange by the Central Government under the SCRA, and which shall be re-registered as a company limited by shares, in pursuance of clause 3 of this Scheme. 2.3 Governing Board means the Board of Directors of GSE. 2.4 Member means a person who is a member of GSE on the day preceding the date of re-registration, as per the register of members maintained by it. 2.5 Shareholder means a person who holds any equity share(s) of GSE. 2.6 Trading Member means a stock broker of GSE and registered with SEBI as such under the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. 2.7 Words and expressions used and not defined in this Scheme but defined in the SEBI Act, 1992, the Depositories Act, 1996, the SCRA, the Companies Act, 1956, the Rules and Regulations made under these Acts, the Memorandum and Articles of Association, Rules, Bye-laws and Regulations of GSE shall have the same meanings respectively assigned to them in the above mentioned Acts, Memorandum and Articles of Association, Rules, Bye-laws and Regulations. 3. Re-registration 3.1 GSE shall re-register itself, prior to Due Date, as a company limited by shares under section 12 of the Companies Act, 1956, in the name and style of Gauhati Stock Exchange Limited , in accordance with section 32 of the Companies Act, 1956. 3.2 The Members, as may be identified by the Council of Management of GSE, shall each subscribe to and pay for 1,000 fully paid up equity shares of 10/- each for cash at par, for the purpose of its re-registration. 4. Governing Board 4.1 The first Governing Board on re-registration shall comprise of Directors as are named as first directors in the Articles of Association of GSE, subject to the condition that the representatives of the Members do not exceed one-fourth of the total strength of the Governing Board. 4.2 The Governing Board, on and from the Due Date, shall be constituted in accordance with the provisions of the Articles of Association of GSE in force from time to time: Provided that (i) the representation of Trading Members does not exceed one-fourth of the total strength of the Governing Board, and the remaining directors are appointed in the manner as may be specified by SEBI from time to time, and (ii) the Chief Executive, by whatever name called, is an ex-officio director. 4.3 Notwithstanding anything contained in clause 4.2, SEBI may nominate directors on the Governing Board as and when deemed fit. 5. Allotment of Shares 5.1 Every Member (other than the Members who have subscribed under clause 3.2) or his nominee, as the case may be, shall be entitled to 1,000 fully paid-up equity shares of the face value of 10/- each for cash at par of GSE. 5.2 GSE shall allot the equity shares to the entitled Members as referred to in clause 5.1 or their nominees, as the case may be, by the Due Date: Provided that the allotment to a Member suspended by GSE shall be held in abeyance till the suspension continues. 5.3 The invitation to subscribe to, and the offer, issue and allotment of equity shares of GSE pursuant to this clause shall not be considered as being an invitation, offer, issue or allotment to the public. 6. Listing of Shares GSE may at any time list its securities on any recognised stock exchange. 7. Trading Rights 7.1 A Member, who is registered as a stock broker on the day preceding the Due Date, shall become a Trading Member on the Due Date. 7.2 A Member, who is not registered as a stock broker on the day preceding the Due Date, shall become a Trading Member on being registered as a stock broker under the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 within 3 months from the Due Date. 7.3 After the Due Date, a person desirous of becoming a Trading Member shall be admitted if he complies with requirements and brings in specified fees and deposits as specified in the Rules, Bye-laws and Regulations of GSE. 7.4 GSE shall, for the purpose of admitting any person as a Trading Member, follow uniform standards in terms of capital adequacy, deposits, fees, etc. irrespective of mode of acquisition of trading rights by that person: Provided that different standards may be followed for admission of a person as a Trading Member who has acquired trading rights by way of transmission. 7.5 A Trading Member may surrender his trading rights to GSE in the manner specified in the Rules, Bye-laws and Regulations of GSE. 7.6 Irrespective of the date or mode of acquisition of trading rights, the Trading Members shall have uniform rights and privileges. 7.7 Trading Members on the Due Date shall continue to have the same rights and privileges in respect of their clients and constituents and other members arising out of or under any act, omission or contract or law, notification, order, direction, etc. as had accrued to them while being Members on or before the Due Date. 7.8 Trading Members shall be bound by all obligations and liabilities towards their clients and constituents, SEBI, GSE and other authorities or other persons arising out of or under any act, omission or contract or law, notification, order, direction, etc. while being Members on or before the Due Date. 7.9 It shall not be necessary for a person to be a Trading Member, in order for him to be a Shareholder. 7.10 It shall not be necessary for a person to be a Shareholder, in order for him to be a Trading Member. 8. Shareholding Rights 8.1 GSE shall ensure that at-least 51% of its equity shares are held by public other than shareholders having trading rights in the manner and within the period prescribed in sub-section (8) of Section 4B of the SCRA. 8.2 On and from the Appointed Date, GSE shall ensure that public, other than shareholders having trading rights, continuously hold at least 51% of equity shares. 8.3 On and from Due Date, no Shareholder, who is a Trading Member, shall have voting rights (taken together with voting rights held by him and by persons acting in concert with him) exceeding 5% of the voting rights in GSE. 9. Memorandum and Articles of Association, etc. 9.1 The Memorandum and Articles of Association, Rules, Bye-laws and Regulations of GSE on the day preceding the Due Date shall, unless contrary to or inconsistent with or excluded by this Scheme, apply to it on and from the Due Date. 9.2 GSE shall incorporate the provisions of this Scheme appropriately in its Memorandum and Articles of Association, Rules, Bye-laws and Regulations on or before the Due Date. 9.3 The Memorandum and Articles of Association, Rules, Bye-laws and Regulations of GSE may be amended after the Due Date in accordance with the applicable laws, provided that no such amendment is inconsistent with any provision of this Scheme. 10. Transfer of Clearing and Settlement Functions 10.1 GSE shall, within two years of the Due Date, subject to the prior approval of SEBI, transfer the duties and functions of its clearing house to a Clearing Corporation, recognised under the SCRA. 10.2 Until the duties and functions of the clearing house are transferred as provided in clause 10.1, the clearing and settlement functions in relation to trading on GSE shall be carried out by the clearing and settlement mechanism as used by GSE at present or in such other manner as the Governing Board may determine. 11. Utilisation of Assets and Reserves 11.1 GSE shall not do anything contrary to the provisions of section 4B (3) of the SCRA. 11.2 Without prejudice to the generality of the provisions in 11.1, GSE shall not use its assets and reserves as on the date of publication of this Scheme or the proceeds from disposal of such assets or the proceeds from disposal of successive species of assets acquired from the proceeds of disposal of such assets for any purpose other than discharging the current liabilities outstanding as on the date of publication of this Scheme or the business operations of stock exchange. 12. Compliance with this Scheme 12.1 GSE shall ensure compliance with the provisions of this Scheme at all times and shall not do anything contrary to the provisions of this Scheme. 12.2 GSE shall report compliance with the provisions of this Scheme in such manner as may be required by SEBI from time to time. 13. Removal of Difficulties If any difficulty arises in giving effect to the provisions of this Scheme, SEBI may, at the written request of GSE, relax any of the provisions of this Scheme. *********