Stock broker registration and fee continuity depend on strict compliance with exchange-wise registration and conversion conditions.

A stock broker operating on more than one stock exchange must obtain a separate certificate of registration for each exchange, and fee is payable accordingly. Fee continuity under clause (4) of Schedule III to the 1992 Stock Brokers and Sub-Brokers Regulations applies only where a partnership or individual membership is converted into a corporate entity and the prescribed statutory conditions are strictly met, including whole-time directorship and the required shareholding continuity. On the stated facts, a transfer of membership to an existing company did not satisfy those conditions, so the exemption was unavailable and the fee claim failed.

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Issues: (i) Whether a stock broker requires multiple registrations for operating on more than one stock exchange, or whether a single registration is sufficient; (ii) Whether the appellant company was entitled to fee continuity benefits under clause (4) of Schedule III to the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992.

Issue (i): Whether a stock broker requires multiple registrations for operating on more than one stock exchange, or whether a single registration is sufficient.

Analysis: The issue stood covered by the earlier binding decision of the Court, which held that a stock broker must obtain a certificate of registration for each stock exchange on which it operates and fee is payable accordingly. The legal position was treated as settled and no further reconsideration was undertaken.

Conclusion: The issue was decided against the appellant.

Issue (ii): Whether the appellant company was entitled to fee continuity benefits under clause (4) of Schedule III to the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992.

Analysis: Fee continuity was available only where an individual or partnership membership was converted into a corporate entity and the statutory conditions were satisfied, including the erstwhile member being a whole time director and holding the prescribed shareholding for the specified period. On the facts, the membership card was transferred to an existing company, the erstwhile member was not shown to be a whole time director, and the required continuity of conversion was not established. The statutory conditions for exemption were therefore not met.

Conclusion: The company was not entitled to fee continuity benefits and the claim for exemption failed.

Final Conclusion: The company's challenge to the fee demand failed, while the Board's position on the applicable fee liability was upheld in the connected matter.

Ratio Decidendi: Fee continuity exemption for a converted stock-broker entity is available only upon strict satisfaction of the statutory conditions governing conversion, continuity, director status, and shareholding; a mere transfer of membership to an existing company does not attract the exemption.

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