SEBI : INB to be on C/N & transfer deed

Securities and Exchange Board of India (SEBI)

Executive Director

To,

The President/Executive Director, of
All recognised Stock Exchanges

Dear Sir,

INB to be on C/N & transfer deed

You are aware that while delivering shares in the market, the delivering broker is required to affix, on the reverse of the transfer deed a rubber stamp indicating his name, clearing number allotted to him by the Stock Exchange of which he is a member and date of such delivery. This is to facilitate the last purchaser, in the event of any problems of bad delivery etc., to approach the first introducing broker for rectification of defect(s). However in the absence of any indication of Stock Exchange of which the introducing broker is a member, this task is rendered rather difficult. To overcome this problem SEBI vide D O no. SE/965 dated February 3rd, 1992 had advised all the Stock Exchanges to instruct their member brokers to affix before their names and clearing numbers, the abbreviation of the Stock Exchange of which they are members, viz., BOM(for Bombay Stock Exchange), CAL (for Calcutta Stock Exchange), MAD (for Madras Stock Exchange), DE (for Delhi Stock Exchange) etc. It is however, observed that the suggestion made by SEBI has not been implemented by the member-brokers of the various Stock Exchanges.

Meanwhile, SEBI has registered brokers of 21 recognised Stock Exchanges in the country under Section 12(1) of SEBI Act, 1992 and given each of them a unique registration number. This is based on ISO9000 specifications and would eventually help in integration of local bourses with bourses elsewhere in the world. This registration number which is uniform in its structure, takes in to account the Stock Exchange of which the broker is a member. Each of the Stock Exchanges in the country has been given a two-digit code which is incorporated in the twelve digit registration number given to the brokers. The codes followed for the different Stock Exchanges are as given in the Annexure. The code number for the exchange is the first two digits after the letters “INB” in the registration number.

Since his registration number would facilitate better monitoring and data management across the Stock Exchanges, it is suggested that these numbers should over a period of time replace the existing system of allotment of clearing numbers to member-brokers followed by different Stock Exchanges. However taking cognizance of the practical difficulties that might be faced especially on the trading floor, the usage of these numbers to begin with, may be limited to the following:

(1) All the brokers should have their SEBI Registration number preprinted on their contract notes.

(2) All brokers should affix rubber stamp on the reverse of transfer deeds with their trade name and SEBI registration number as it appears in the SEBI Registration Certificate. Also the stamp should indicate the name of the Stock Exchange of the which the Broker is a member. The rubber Stamp should be as under :

i. Name & Name of the Stock Exchange : e.g. J.V.Shah, BOM.

ii. SEBI Registration Number :

iii. The brokers should also be instructed to invariably fill in the date of delivery while delivering the shares in the market.

(3) All the stock Exchanges should incorporate the SEBI Registration numbers of the brokers in the various computer reports generated by them. The various Stock Exchanges which are planning to introduce screen based trading may consider the possibility of using the SEBI Registration number and doing away with the existing system of clearing code numbers.

You are therefore requested to please instruct all the member brokers of your exchange to immediately implement the suggestions at (1) and (2) above and let us have your views in regard to (3) above.

A copy of the instructions issued to the member brokers in this regard may please be endorsed to us.

In the meantime, please acknowledge the receipt of this letter.

Yours faithfully,
sd/-

(U.C.DIKSHIT)

Encl: a/a

ANNEXURE

TABLE FOR EXCHANGE CODES