SECURITIES CONTRACTS (REGULATION) RULES, 1957
These rules may be called the Securities Contracts (Regulation) Rules, 1957.
In these rules, unless the context otherwise requires -
(a) "form" means a form appended to these rules;
(b) "the Act" means the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(c) "government company" means a company in which not less than fifty-one percent of the share capital is held by the Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Governments 16[;]
17[(d) "public" means persons other than-
(i) the promoter and promoter group;
(ii) subsidiaries and associates of the company.
Explanation: For the purpose of this cla
An application under section 3 of the Act for recognition of a stock exchange shall be made to the 6[Securities and Exchange Board of India] Form A.
6. Substituted for "Central Government" by Amendment Rules, 1996 w.e.f. 23.12.1996 for the words : -
"Central Government in"
(1) There shall be paid in respect of every application under rule (3) a fee of rupees five hundred.
(2) The amount of the fee shall be deposited in the nearest government treasury or the nearest branch of the State Bank of India;
Provided that at Bombay, Calcutta, Madras, Delhi and Kanpur, the amount shall be deposited in the Reserve Bank of India.
(3) The amount of the fee so deposited shall be credited to the receipt head "XLVI-Miscellaneous-other fees, fines and forfeitures".
(i) such company is formed in compliance with the provisions of section 12 of the said Act.
ii) such company undertakes to comply with such financial requirement and norms as may be specified by the Securities and Exchange Board of India for the registration of such company under sub-section (1) of section12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(iii) majority of the directors of such company are shareholders of the company and not less than 40% of the paid-up equity capital of the company is held by thesedirectors themselves or by the body corporate appointing them as directors on the board of such company;
(iv) the directors of the company are not disqualified for being members of a stockexchange under clause (1) [except sub-clause (f) thereof] or clause (3
Along with the application and particulars it should contain Every application shall be accompanied by four copies of the rules (including the memorandum and articles of association where the applicant stock exchange is an incorporated body) and bye-laws of the stock exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the government treasury, or as the case may be, the State Bank of India or the Reserve Bank of India, in respect of the amount of the fee deposited and shall contain clear particulars as to the matters specified in the annexure to Form A.
Before granting recognition to a stock exchange under section 4 of the Act, 7[Securities and Exchange Board of India] may make such inquiries and require such further information to be furnished, as it deems necessary, relating to the information furnished by the stock exchange in the Annexure to its application in Form A.
7. Substituted for "Central Government" by Amendment Rules, 1996 w.e.f. 23.12.1996 for the words : -
"the Central Government"
The recognition granted to a stock exchange shall be in form B and be subject to the following conditions namely:-
(a) that the recognition unless granted on a permanent basis, shall be for such period not less than one year as may be specified in the recognition;
(b) that the stock exchange shall comply with such conditions as are or may be prescribed or imposed under the provisions of the Act and these rules from time to time.
(1) Three months before the expiry of the period of recognition, a recognised stock exchange desirous of renewal of such recognition may make an application to the 7[Securities and Exchange Board of India] in Form A.
(2) The provisions of rule 3, rule 4, rule 5 , rule 5A and rule 6 shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of any application for renewal of recognition shall be rupees two hundred.
The rules relating to admission of members of a stock exchange seeking recognition shall inter alia provide that:
(1) No person shall be eligible to be elected as a member if -
(a) he is less than twenty-one years of age;
(b) he is not a citizen of India:
Provided that the governing body may in suitable cases relax this condition with the prior approval of the 7[Securities and Exchange Board of India];
(c) he has been adjudged bankrupt or a receiving order in bankruptcy has been made against him or he has been proved to be insolvent even though he has obtained his final discharge;
(d) he has compounded with his creditors unless he has paid sixteen annas i
All contracts between the members of a recognised stock exchange shall be confirmed in writing and shall be enforced in accordance with the rules and bye-laws of the stock exchange of which they are members.
The Securities and Exchange Board of India may nominate one or more persons not exceeding three in number, as member or members of the governing body of every recognised stock exchange. Such member or members shall enjoy the same status and powers as other members of the governing body.
After receiving the report of the result of an enquiry made under clause (b) of sub-section (3) of Section 6 of the Act, the 7[ Securities and Exchange Board of India] may take such action as they deem proper and, in particular, may direct the governing body of the stock exchange to take such disciplinary action against the offending member, including fine, expulsion, suspension or any other penalty of a like nature not involving the payment of money, as may be specified by the 7[ Securities and Exchange Board of India]; notwithstanding anything to the contrary contained in the rules or bye-laws of the stock exchange concerned, the governing body shall give effect to the directions of the Central Government in this behalf and shall not in any manner commute, revoke or modify the action taken in pursuance of such directions, without the prior approval of the 7[ Securities and Exchange Board of India]. The Central Government ma
Every member shall get his accounts audited by a chartered accountant whenever such audit is required by the 7[ Securities and Exchange Board of India]
The written notice referred to in section 5 of the Act shall be in Form C.
Every recognised stock exchange shall maintain and preserve the following books of account and documents for a period of five years:
(1) Minute books of the meetings of-
(a) members;
(b) governing body;
(c) any standing committee or committees of the governing body or of the general body of members.
(2) Register of members showing their full names and addresses. Where any member of the stock exchange is a firm, full names and addresses of all partners shall be shown.
(3) Register of authorised clerks.
(4) Register of remisiers of authorised assistants.
(5) Record of
(1) Every member of a recognised stock exchange shall maintain and preserve the following books of account and documents for a period of five years:
(a) Register of transactions (Sauda book).
(b) Clients ledger.
(c) General ledger.
(d) Journals.
(e) Cash book.
(f) Bank pass-book.
(g) Documents register showing full particulars of shares and securities received and delivered.
(2) Every member of a recognised stock exchange shall maintain and preserve the following documents for a period of two years:
(a) Members' contrac
(1) (a) The person or persons appointed by the 7[ Securities and Exchange Board of India] to make an inquiry under clause (b) of sub-section (3) of section 6 of the Act shall hereafter in this rule be referred to as the `inquiring authority';
(b) where the inquiring authority consists of two or more persons, one of them shall be appointed as the chairman or senior member thereof;
(c) the inquiring authority shall hand over a statement of issues to be inquired into to the governing body or the member concerned, as the case may be, who will be given a reasonable opportunity to state their or his side of the case;
(d) if any witness is called for examination, an opportunity shall be provided to the governing body or the member whose affairs are being inquired into, as the case may be, to c
(1) Every recognised stock exchange shall before the 31st day of January in each year or within such extended time as the 7[ Securities and Exchange Board of India] may, from time to time, allow, furnish the 7[ Securities and Exchange Board of India] annually with a report about its activities during the preceding calendar year, which shall inter alia contain detailed information about the following matters:
(a) changes in rules and bye-laws, if any;
(b) changes in the composition of the governing body;
(c) any new sub-committees set up and changes in the composition of existing ones;
(d) admissions, re-admissions, deaths or resignations of members;
(e) disciplinary action against members;
(i) the official rates for the securities enlisted thereon;
(ii) the number of shares delivered through the clearing house;
(iii) the making-up prices;
(iv) the clearing house programmes;
(v) the number of securities listed and de-listed during the previous three months;
(vi) the number of securities brought on or removed from the forward list during the previous three months; and
(vii) any other matter as may be specified by the 7[ Securities and Exchange Board of India].
7. Substituted for "Central Government" by Amendment Rules, 1996 w.e.f. 23.12.1996 for the words : -
The bye-laws to be made, amended or revised under the Act shall be published for criticism in accordance with the provisions of section 23 of the General Clauses Act, 1897 both in the Gazette of India and Official Gazette of the State in which the principal office of the recognised stock exchange is situate.
(1) A public company as defined under the Companies Act, 1956, desirous of getting its securities listed on a recognised stock exchange, shall apply for the purpose to the stock exchange and forward along with its application the following documents and particulars :
(a) Memorandum and articles of association and, in case of a debenture issue, a copy of the trust deed.
(b) Copies of all prospectuses or statements in lieu of prospectuses issued by the company at any time.
(c) Copies of offers for sale and circulars or advertisements offering any securities for subscription or sale during the last five years.
(d) Copies of balance sheets and audited accounts for the last five years, or in the case of new companies, for such shorter period for whic
(1) Every listed company 21[(other than public sector company)] shall maintain public shareholding of at least twenty five per cent.:
25[Provided that any listed company which has public shareholding below twenty five per cent. on the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010, shall increase its public shareholding to at least twenty five per cent. within a period of three years from the date of such commencement, in the manner specified by the Securities and Exchange Board of India.
Explanation: For the purposes of this sub-rule, a company whose securities has been listed pursuant to an offer and allotment made to public in terms of sub-clause (ii) of clause (b) of sub-rule (2) of rule 19, shall maintain minimum twenty five per cent. public shareholding from the date on which the public shareholding i
(1) A Collective Investment Management Company (CIMC) which is desirous of getting its any collective investment scheme listed on a recognised stock exchange, shall apply for the purpose to the stock exchange and forward along with its application the following documents and particulars :
(a) Certificate of incorporation, memorandum and articles of association of the company and the copy of the trust deed of the scheme intended to be listed.
(b) Copies of all prospectuses or statements in lieu of prospectuses issued by the company at any time.
(c) Copies of offers for sale and circulars or advertisements offering any unit or other instrument for subscription or sale during the last five years, or in the case of a new company, such shorter period during which the company has been in existence.
A recognized stock exchange may, without prejudice to any other action that may be taken under the Act or under any other law for the time being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations made by the Securities and Exchange Board of India, namely :-
(a) the company has incurred losses during the preceding three consecutive years and it has negative networth;
(b) trading in the securities of the company has remained suspended for a period of more than six months;
(c) the securities of the company have remained infrequently traded during the preceding three years;
(d) the company or any of its promoters or any of its director has been convicted for failure to comply with any of the
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