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TMI BlogOrder under Section 4B (6) read with Section 4B (7) of the Securities Contracts (Regulation) Act, 1956 in the matter of the Inter-Connected Stock Exchange of India Limited (Corporatisation and Demutualisation) Scheme, 2005.X X X X Extracts X X X X X X X X Extracts X X X X ..... to as the 'SEBI') in terms of sub-section (1) of section 4B of the SCRA. SEBI, vide letter dated May 25, 2005, advised ISE to submit a revised Scheme, after taking into account the provisions of the BSE (Corporatisation and Demutualisation) Scheme, 2005 that may be relevant and applicable to ISE. 3.0 Thereafter, ISE, vide its letter dated June 11, 2005, submitted a revised Scheme for its corporatisation and demutualisation after taking into account the provisions of the BSE Scheme. SEBI made enquiries and obtained further information from ISE through discussions with it. The Scheme was discussed in a meeting with the Officials of ISE on June 23, 2005. Based on the discussions during the said meeting, ISE desired to resubmit the Scheme. 4.0 Accordingly, ISE, 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 ISE as a company limited by shares, segregation of ownership and management from the trading rights of the members, restriction on voting ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of the Order under sub-section (7) of section 4B of the SCRA. 2.2 "Governing Board" means the Board of Directors of ISE. 2.3 "Inter-connected Stock Exchange of India Limited (ISE)" means the company limited by guarantee incorporated under section 12 of the Companies Act, 1956, having its principal place of business at International Infotech Park, Tower 7, 5th Floor, Vashi, Navi Mumbai - 400 703 and recognised as a Stock Exchange under the SCRA, and which shall be re-registered as a company limited by shares, in pursuance of clause 3 of this Scheme. 2.4 "Shareholder" means a person who holds any equity share(s) of ISE. 2.5 "Trading Member" means a stock broker of any segment of ISE and registered with SEBI as such under the SEBI (Stock Brokers & Sub-brokers) Regulations, 1992. 2.6 Words and expressions used and not defined in the Scheme but defined in the Securities and Exchange Board of India Act, 1992, the Depositories Act, 1996, the SCRA, the Companies Act, 1956, the rules and regulations under these Acts, memorandum and articles of association, the rules, bye-laws and regulations of ISE shall have the same meanings respectively assigned to them in the above mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring corporation 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. 5.3 Notwithstanding anything contained in clause 5.2, SEBI may nominate directors on the Governing Board as and when deemed fit. 6. Listing of Shares ISE may at any time list its securities on any recognised stock exchange. 7. Demutualisation 7.1 A Trading Member may or may not be a shareholder. 7.2 A shareholder may or may not be a Trading Member. 8. Trading Rights 8.1 A Trader or Dealer, who is registered as a stock broker on the day preceding the Due Date, shall become a Trading Member of the Cash Segment of ISE on the Due Date. 8.2 A Trader or Dealer, who is not registered as a stock broker on the day preceding the Due Date, shall become a Trading Member of the Cash Segment of ISE on and from the date he is registered as a stock broker under the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992: Provided that his application for registration is submitted to SEBI within one month of the Due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the Due Date, no shareholder, who is a Trading Member, shall have voting rights (taken together with the voting rights held by him and by persons acting in concert with him) exceeding 5% of the voting rights in ISE. 10. Memorandum and Articles of Association, etc. 10.1 The memorandum and articles of association, rules, bye-laws and regulations of ISE 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. 10.2 ISE 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. 10.3 The memorandum and articles of association, rules, bye-laws and regulations 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. 11. Utilisation of Assets and Reserves 11.1 ISE 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 clause 11.1, ISE shall not use its assets and reserves, as on the date of publicatio ..... 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