The Presidents/Executive Directors
of all recognised Stock Exchanges in India
Status of implementation of decisions
Please refer to our letter dated February 4, 1991 enclosing a copy of directive issued by the Ministry of Finance F. No. 14/3/SE/85 dated November 14, 1985 regarding review of the existing system of Bye-laws and Regulations of Stock Exchanges relating to trading in securities and you were requested to ensure implementation of the instructions issued by the directive. It was, inter alia, indicated therein that every stock broker must report to the Stock Exchange on a daily basis, scrip-wise list of names of parties, who have purchased or sold shares of the market value of more than Rs. 1 lakh in cash or settlement basis. In this connection, we enclosed for your information a copy of a press report which appeared in the Asian Wall Street Journal of August 14, 1991 indicating the prescription by the Securities and Exchange Commission in the United States of reporting rules for large securities transactions, the contents of which are self-explanatory. It needs hardly any emphasis that such reporting requirements by member-brokers are a must if the secondary market has to function on healthy lines and undue speculation and insider trading in securities are kept under a reasonable check. You are, therefore, once again requested to please prescribe disclosure of information by member-brokers to the Exchange authorities of large transactions by their clients in conformity with the above Government directive and send us report on implementation of the same by 1st November 1991.
(A. L. Bhatia)