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TMI BlogChange in Status and Constitution of the Stock Brokers in Cash and Derivatives Segments of the Exchanges under Rule 4 (c) of the SEBI (Stock Brokers and Sub-Brokers) Rules, 1992X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificate of registration to a stock-broker. Rule 4 (c) of the said Rules prescribes that in case of any change in the status and constitution, the stock-broker shall obtain prior approval of the SEBI to continue to buy, sell or deal in securities in any stock exchange. In the absence of any general advice to stock exchanges about the circumstances requiring prior approval, it is observed that different exchanges follow different practices. For a particular type of change, some exchanges seek approval while some others do not. In order to clarify the circumstances which require prior approval and streamline the process of such approvals, this circular is being issued. 2. The following table enumerates the circumstances which would mean ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity deposit of the broker shall not be released to the broker by the exchange. 3. In all the above cases (Para 2), the exchange must approve the application of the broker and forward the same, within a week of its approval, to SEBI for prior approval along with a confirmation (if otherwise, the details of the same) on the following: a) the broker is not connected with any of the defaulting brokers of any exchange, b) no complaint / arbitration /disciplinary proceeding is pending against the broker, c) no investigation / inquiry by any exchange is pending against the broker, d) as on date of application, the broker, as a broker of the concerned exchange, has paid fees, as applicable, to SEBI, e) the turnover details necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in shareholding pattern without change in control, b. Issue and redemption of preference shares, issue of bonus shares, and c. Change in directors other than designated / whole time directors 5. In order to enable SEBI to determine fee liability of the broker, the exchange shall provide turnover details of the broker in the prescribed manner along with the application for prior approval or fee clearance. 6. Change in name would not amount to change in status and constitution and hence no approval is required for the same. However, change in name must be intimated to SEBI within a week of the change in name along with the original certificate for record. 7. This circular supercedes SEBI circulars / letters (i) SMD/BAD-II/9657/98 da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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