Securities and Exchange Board of India
Chief General Manager
Secondary Market Department
SMD/DBA-II/Cir-28/12348/03
June 25, 2003
To
The Executive Director/Managing Director
All Stock Exchanges
Dear Sir/ Madam,
Sub: Failure to pay fees in the manner specified in Schedule III of the SEBI (Stock brokers and Sub-brokers) Rules and Regulations, 1992 read with Circular No. SMD/ Policy/ Cir-07/ 2002 dated March 28, 2002
In terms of Rule 4 (d) of the SEBI (Stock brokers and Sub-brokers) Rules, 1992, the certificate of registration to a stock broker is granted subject to the condition inter-alia that he shall pay the amount of fees for registration in the manner provided in the regulations. In terms of regulation 10 of the SEBI (Stock brokers and Sub-brokers) Regulations, 1992 (hereinafter referred to as the ‘the said Regulations’) a stock broker having certificate of registration is under obligation to pay such fees and in such manner as provided in Schedule III of the said Regulations.
As per Regulation 10 (2), where a stock broker fails to pay fees as provided in Regulation 10, the Board may suspend the registration certificate whereupon the stock broker shall cease to buy, sell or deal in securities as a stock broker. Further Regulation 25 (a) provides that a stock broker, who fails to comply with any condition subject to which registration has been granted, shall be liable to action in the manner provided under the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002.
Vide Circular No. SMD/Policy/Cir-07/2002 dated March 28, 2002, SEBI had provided a facility to all brokers who did not pay fees, that they should pay at least 50% of the principal due in the cash market and give an undertaking to pay the balance fees within a period of two years along with interest. Such facility was kept open to all brokers up to March 31, 2003. The decision that the 50% facility would not be available after March 31, 2003 was communicated to all Exchanges vide circular SMD/DBA-II/Cir-01/178 /03 dated January 03, 2003.
You are advised to bring to the notice of all members that those members who have failed to comply with the 50% facility by March 31, 2003 and for whom collection of fees has not been stayed by any Court of law, are required to pay the entire fees and interest payable up to financial year 2002-03 by August 31, 2003, failing which, appropriate action as permissible under the SEBI Act, 1992 or the SEBI (Stock brokers and Sub-brokers) Regulations, 1992 would be initiated.
Yours faithfully,
(M. S. Sahoo)
