SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, A Wing, Gr. Floor,
224, Nariman Point, Mumbai 400 021
November 19, 1998
The President/Executive Director/Managing Director
of all Stock Exchanges
Sub: Interest on delayed/non/short payment of fees by brokers
As you are aware fees are payable by a broker to SEBI to keep the registration in force. In accordance with Regulation 10 (Schedule III) of SEBI (Stock Brokers & Sub-Brokers) Rules & Regulations 1992, fees as computed with reference to the annual turnover relating to the preceeding financial year is payable by the brokers on or before 1st day of October of the financial year to which such payment relates in the manner set out below :-
(a) Where the annual turnover does not exceed rupees one crore during any financial year, a sum of rupees five thousand for each financial year or;
(b) Where the annual turnover of the stock broker exceeds rupees one crore during any financial year, a sum of rupees five thousand plus one hundredth of one percent of the turnover in excess of rupees one crore for each financial year;
1. After the expiry of five financial years from the date of initial registration as a stock-broker, he shall pay a sum of rupees five thousand for a block of five financial years commencing from the sixth financial year after the date of grant of initial registration to keep his registration in force.
Wherever court cases are pending in various High Courts, fees are payable by the petitioners as per the court orders.
However, in practice, it has been observed that some of the brokers do not pay any fees at all at the stipulated time or remit only Rs.5000/- irrespective of the turnover even where court cases are not pending. Even in case of Exchanges where court cases are pending, the remittances are not received on the basis of the amounts stated as per the court orders on time.
Therefore the SEBI Board in its meeting held on November 10, 1998, has now approved introduction of the following provision in SEBI (Stock Brokers & Sub-Brokers) Rules & Regulations 1992 whereby the stock broker would be liable to pay interest in case of non/ short / late remittance of fees:-
Those brokers who fail to pay fees referred to in clauses (a),(b) & (c) of Regulation 10( Schedule III) of SEBI (Stock Brokers & Sub-Brokers) Rules & Regulations 1992, as on the first day of October of the financial year to which such payment relates or pay short, shall be liable to remit interest @ 15 % p.a. for each month of delay in remittance on amount payable as calculated on the basis of certified turnover figures provided by the concerned stock exchanges or in accordance with the court orders, wherever applicable.
The above amendment is likely to be notified shortly. Meanwhile, you are, therefore, advised to inform all your members to pay up the outstanding amounts due to SEBI immediately.
M. D. PATEL
SECONDARY MARKET DEPARTMENT