July 13, 1995
The President/Executive Director
Vadodara/Coimbatore/OTC Exchange of India.
Registration of sub-brokers
Please refer to our letter No.SMD-I/3118 dated December 27, 1993 wherein you were advised to ensure that sub-brokers and brokers execute an agreement as required under the SEBI (Stock Brokers & Sub-brokers) Rules & Regulations, 1992. You were also requested to collect registration fees of Rs.1,000/- from each sub-broker and forward the same to us, to enable us to issue certificates of registration. In this connection, it is observed that several applications from sub-brokers received through your Exchange are pending, inter-alia, for want of confirmation of execution of agreement, etc. A list of such pending applications is enclosed for your perusal. You are once again requested to take up the matter with the concerned brokers/ sub-brokers, ensure execution of agreement between sub-brokers and brokers, collect registration fees and forward the same to us to enable us to take further action on the applications. Please bring the contents of the letter to the notice of members of your Exchange as well as the concerned sub-brokers.
Your attention is also drawn to the provisions of Section 12 of SEBI Act 1992 which requires the sub-brokers to get themselves registered with SEBI for doing business in securities. The stock brokers are not supposed to deal with those sub-brokers who are not registered with SEBI.
Please take an early action in the matter and keep us advised of the action taken in this regard.
DIVISION CHIEF (SMD-II)
Encl: List of pending applications forwarded by your Exchange, in the form of Floppy Program – Dbase.