SENIOR EXECUTIVE DIRECTOR

SMD/SED/RCG/270/96
January 19, 1996

To

The Presidents/Executive Directors/
Managing Directors of all the stock exchanges.

Dear Sir,

Please refer to the minutes of the meeting of the Executive Directors/ Presidents/ Managing Directors of all stock exchanges convened by SEBI on December 20-21, 1995. The following decisions relating to reduction of systemic risks was taken in the meeting as mentioned in the minutes :

i) The stock exchanges are required to double their existing base minimum capital requirement for their members from Rs. 5 lakhs to Rs. 10 lakhs in the case of Bombay and Calcutta Stock Exchange, from Rs. 3.5 lakhs to Rs. 7 lakhs in the case of Delhi and Ahmedabad Stock Exchange and from Rs. 2 lakhs to Rs. 4 lakhs in the case of other stock exchanges.

ii) The steps will be taken to ensure that all the active member brokers are insured by June 30, 1996.

iii) The stock exchanges will establish a Clearing House or Clearing Corporation by June 30, 1996.

It is advised that all the decisions must be implemented expeditiously. Progress of implementation should be reported to SEBI in the monthly D.O. letters or by way of special letters.

Yours faithfully,
sd/-
L.K.SINGHVI
SENIOR EXECUTIVE DIRECTOR

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