SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, B Wing, First Floor,
224, Nariman Point, Mumbai 400 021

SMDRP/POLICY/CIR-49/2001
October 22, 2001

To

The Executive Directors/ Managing Directors of  All Stock Exchanges.

Dear Sir,

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Sub.: Advertisement by brokers/ sub-brokers and grant of trading terminals.Advertisement by brokers/ sub-brokers.

It has come to the notice of SEBI that certain brokers and sub-brokers are advertising their business in prohibition of Clause C(4) and C(5) of the Code of Conduct specified in Schedule II of Regulation 7 and Clause C(5) and C(6) of the Code of Conduct specified in Schedule II of Regulation 15 of SEBI (Stock Brokers and Sub-brokers) Regulations, 1992, respectively. The Stock Exchanges are advised to bring the same to the notice of their brokers and ensure that they do not issue such advertisements in future, including in their internet sites, by subsidiaries, group companies etc. in contravention to the said Regulation and Bye Laws of the concerned Stock Exchange. Similarly, the Stock Exchanges are advised to inform their brokers to ensure that their sub-brokers do not issue such advertisements in future.

Grant of trading terminals

It has further come to the notice of SEBI that the trading terminals granted to the stockbrokers at various locations are being mis-utilised for unregistered sub-broking activities. In view of the above, Exchanges are advised to grant trading terminals only at the members’ registered office, branch offices and their registered sub-brokers’ offices. Trading terminals granted earlier in places other than mentioned above should be withdrawn immediately. The Stock Exchanges shall amend their bye-laws accordingly to take action against the broker who mis-utilises or lets misutilisation of their trading terminals for unregistered sub-broking activities.

Stock Exchanges are also advised to amend their bye-laws suitably to prohibit their members from dealing with sub-brokers who are not registered with SEBI.

Yours faithfully,

S.V. MURALIDHAR RAO
DY. GENERAL MANAGER
SECONDARY MARKET DEPARTMENT
mdrao@sebi.gov.in

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