Ref. SMD-II/52
January 10, 1996

To,

The President / Executive Director/Managing Director
of all the Stock Exchanges

Dear Sir,

As you are aware, pursuant to the SEBI Order dated April 20, 1993 under Section 8 of the Securities Contracts (Regulation) Act, 1956 all Stock Exchanges have amended their respective Articles of Association / Rules to, inter-alia , provide for appointment of Executive Director and that the appointment , terms and conditions of service, renewal of appointment, and termination of services of Executive Director are subject to prior approval of SEBI.

In this connection, it is observed that while the Exchanges seek prior approval of SEBI for the appointment of Executive Director, all exchanges have not sought approval from SEBI for the constitution of the Committee for selection of Executive Director. Further the Committee generally consists of members of the respective Stock Exchanges and there are no outside experts to assist the Committee in selection of Executive Director.

With a view to bring about uniformity and professionalism in the recruitment process, it has been decided that the Stock Exchanges should, in future, constitute a Committee for the selection of Executive Director with prior approval of SEBI. Also the Committee should generally consist of four persons, one representative from the Exchange, two outside experts and one SEBI nominee.

Yours faithfully,
sd/-

M D Patel
Executive Director

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