Securities and Exchange Board of India (SEBI)
March 17, 1994
The Presidents/Executive Directors of
Kutch/ Uttar Pradesh/ Vadodara/OTC Exchange of India
Registration of Sub-Brokers
Under Regulation 11 of SEBI (Stock Brokers and Sub-Brokers) Rules and Regulations, 1992 the stock exchanges are required to forward the applications of sub-brokers to SEBI after certifying that the applicants are eligible for registration. We have been receiving applications which are not complete in all respects and the applicants do not comply with all the requirements of Rules and Regulations. This leads to avoidable correspondence and delays the process of issuing registration certificates. We are enclosing a check list which would help the stock exchanges and member brokers to ensure then compliance of all the requirements. The copies of the check list may be provided to your member brokers also. While forwarding the applications the stock exchanges should send all information in the following format as already advised in our letter of September 9/16 1993 so that proper records may be maintained :
Sr No Name of Name of Draft No./Date Name of the
Sub Broker Affiliating Member Bank
Please bring it to the notice of your member brokers that dealing with sub-brokers who are not registered ( or treating them as clients and not sending their applications for registration) is violation of the SEBI Act, 1992 and such stock brokers are liable to action.
CHECK LIST FOR STOCK EXCHANGES AND STOCK BROKERS FOR REGISTRATION OF SUB BROKERS
1. Age of applicant not to be less than 21 years (Age is mentioned in the recommendation letter of stock broker)
2. Applicant should have passed at least 12th Standard examination.
3. If applicant is a partnership firm or a corporate body all the partners or directors should confirm with the criteria specified in (1) and (2) above.
4. Recommendation of the stock broker and ensure that the seal of the broker is affixed in the recommendation letter.
5. Two reference including one reference from the banker of the applicant.
6. The applicant should pay the fees of Rs 1000 by bank draft along with application.. In order to ensure that the draft does not become outdated , the application of the sub-broker along with the draft should be forwarded to SEBI immediately.
7. Sub-broker should execute the standard agreement with the stock broker (copy already provided to all the stock exchanges) and an undertaking in this respect should be sent to SEBI.
8. In case the applicant is a corporate body a copy of the Memorandum/Articles of Association should be sent to SEBI.
9. The applicant should not have been convicted of any offense involving fraud or dishonesty.
10. Ensure recommendation of the stock exchange by an authorised official along with the seal of the exchange.