SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, B Wing, First Floor,
224, Nariman Point, Mumbai 400 021
February 7, 2001
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The President/Executive Director/
of all the Stock Exchanges
Composition of the deposit with subsidiary
As per circular no. SMD-II/ALLSE/CIR-02/2000 dated January 10, 2000, the separate deposit required to be maintained by the sub-broker of the subsidiary/company was required to be 25% in the form of cash and the balance 75% in irrevocable bank guarantees.
SEBI have received representations from the stock exchanging requesting that the non cash component of the deposit may be accepted in the form of Fixed Deposit Receipt (FDR) also. SEBI has considered the representation and it has been decided that, the non cash component of the deposit to be maintained by the sub broker with the subsidiary/company could also be in the form of FDR of the bank. These FDRs would be discharged in favour of the subsidiary/company and the subsidiary/company would be given a complete unencumbered and unconditional lien on these FDRs.