Case Law Details
Securities And Exchange Board of India Vs National Stock Exchange Members Association (Supreme Court of India)
Conclusion: In present facts of the case while allowing the appeals, the Hon’ble Supreme Court observed that (i) subordinate legislation has the same superior force as it supplements a mechanism/ procedure (ii) while interpreting the statutory provisions, the Court is always supposed to keep in mind the object or purpose for which the statute has been enacted and (iii) the stock broker not only has to obtain a certificate of registration from SEBI for each of the stock exchange where he operates, at the same time, has to pay ad valorem fee prescribed in reference to each certificate of registration from SEBI.
Facts: The present appeal in this case was made against the judgment and order dated 7th November, 2005 passed by the Division Bench of the High Court of Delhi, setting aside the finding returned by the learned Single Judge of the High Court under judgment dated 26th October, 2004. The Division Bench has arrived at a conclusion that in terms of Section 12(1) of the Securities and Exchange Board of India Act, 1992, a single registration with SEBI is sufficient even if the stock broker has various memberships and functions from several stock exchanges and, therefore, will have to pay the fee for the initial registration with SEBI and, accordingly, set aside paragraph (vi) of Part A of the Circular dated 28th March, 2002 issued by SEBI.
SEBI issued a Circular dated 28th March, 2002 clarifying that every stock broker who has a certificate of registration has to pay the fees prescribed in Schedule III for each and every certificate of registration that he holds.
The association of trading members challenged the Circular dated 28th March, 2002 to the extent that paragraph (vi) of Part A provides the fees payable by a composite corporate member and requires that the stock broker who held more than one registration with SEBI, structured fee would be required to be paid for each registration. It was contended by the association that even if a stock broker has more than one registration from SEBI, he was required to pay fees only with respect to the initial registration with SEBI irrespective of the number of cards held by the broker from the stock exchange and accordingly it was prayed that the clarification made by SEBI under its Circular dated 28th March, 2002 of which a reference has been made, is in contravention to the scheme of the Act, 1992 and deserves to be set aside.
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