SMD/VRN/1476/95
27TH April 1995

To,

The President/Executive Director
OTCEI
92-93 Maker Towers ‘F’
Cuffe Parade
BOMBAY 400 005.

Dear Sir,

Severance of connections with other businesses

The Securities Contract Regulator Rule 1957, particularly Rule 8(1)(f) and Rule 8(3)(f) requires that members, whether individual, partnership or corporate of a Stock Exchange shall not engage in any business other than that of securities. This rule is applicable to dealers, members, and trading members of OTCEI and NSE also. Stock Exchanges are advised that while admitting new members it should be ensured that the applicants do not attract the above stated rule.

It is observed that corporate applicants recently being admitted into various Stock Exchanges are engaged in businesses other than securities business like ICDs, leasing, hire purchase and bill discounting due to which SEBI is not in a position to consider their registration. The members who are already working on various Stock Exchanges as on the date of publication of SEBI (Stock Brokers and Sub Brokers) Rules and Regulations in November 1992 and obtained registration thereunder also will have to severe connections with businesses other than securities business forthwith.

We request the Stock Exchange to report on whether all other members comply with the above stated Rule.

Thanking you,

Yours faithfully,
sd/-
C.B. BHAVE
SR. EXECUTIVE DIRECTOR – SMD

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