Fee continuity exemption for amalgamation fails where the merger is a business choice, not a legal compulsion.

The fee continuity benefit under the registration-fee regime applied only to mergers or amalgamations carried out as a compulsion of law and meeting the prescribed shareholding condition. Where the amalgamation was driven by a business decision to access NSE membership and continue brokerage operations, it was not treated as legally compelled, so the exemption was unavailable. Approval of the scheme by the High Court did not alter the fee consequence under the SEBI fee framework, and fresh registration fees remained payable.

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Issues: Whether the appellant was entitled to fee continuity benefit on amalgamation on the ground that the merger was carried out as a compulsion of law.

Analysis: The fee regime under the Regulations required payment of registration fees in the manner provided in Schedule III. The SEBI circular dated 30.09.2002 exempted fresh fees in cases of mergers or amalgamations carried out as a result of compulsion of law, provided the specified shareholding condition was met. On the facts, the amalgamation was found to be driven by the business decision to access NSE membership and to continue operations as a broker, not by any legal compulsion. The earlier course adopted by the parent exchange and the later choice to amalgamate did not make the merger one compelled by law, and the approval of the scheme by the High Court did not alter the fee consequence under the SEBI regime.

Conclusion: The appellant was not entitled to fee continuity benefit and was liable to pay fresh fees.

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