O P GAHROTRA
SENIOR EXECUTIVE DIRECTOR
The Managing Director/
Executive Director of all Stock Exchanges.
As decided in the meeting of the Executive Committee of the Inter Exchange Co-ordination Group held on December 02, 1996, to have a uniform eligibility criterion for elected members of the Stock Exchanges for membership of the Governing Board, all Stock Exchanges are advised to replace their existing Rules concerning eligibility criterion for Membership of the Governing Board of Stock Exchanges with the following criterion which has been approved by Legal Department, SEBI:
The members constituting the Governing Board of Stock Exchanges is categorised into three categories namely i)Members to be elected from amongst the members of the Stock Exchange (broker members); ii)Members to be nominated by the Central Government or SEBI; iii) Public representatives nominated by SEBI.
For i) above i.e Members to be elected from amongst the members of the Stock Exchange(member brokers) following eligibility criteria is laid down.
In case of INDIVIDUAL members:
“No member shall be eligible to be elected as member of the
Governing Board if-
i) he is not a citizen of India;ii) he has been member for less than three years standing on the 1st day of January of the year in which the election takes place;
iii) he has at any time been declared a defaulter or failed to meet his liabilities in ordinary course or compounded with his creditors”.
In case of a CORPORATE member, one of its whole time directors subject to the fulfilment of the following conditions in addition to the above mentioned conditions for individual members would be eligible to be elected as a member of the Governing Board: 1. In case the director resign/retires from the board of the company, or is removed from the board of the company the post on the Governing Board will fall vacant. The vacancy will be filled as per the Rules of the exchanges and corporate members will not have right to replace the member.2. In case of conversion of individual member/partnership firm into a corporate member, and the individual/partner(s) are whole time director(s) of the corporate then the previous experience of such member(s) would be considered for meeting eligibility norms to become member of the Governing Board.
Further, in the event if cancellation/suspension of the registration as stock broker because of any disciplinary action taken against the member by Exchange/SEBI, the member will not be eligible to be elected and/or to continue on the Governing Board.You are advised to implement the above with immediate effect.
cc: 1. All Sr. Eds/Eds of SEBI
2. Regional Managers of NRO, SRO & ERO.
3. All SEBI Officers who are on the Board of various SEs, with a request to please ensure compliance of the above decisions by their respective SE.
4. All officers of SMD.