TaxTMI 
TaxTMI 
Qualifications for membership of a recognised stock exchange
X X X X Extracts X X X X
X X X X Extracts X X X X
....roker or agent not involving any personal financial liability unless he undertakes on admission to sever his connection with such business : ^3[****] ^4[Provided that nothing herein shall be applicable to any corporations, bodies corporate, companies or institutions referred to in clauses (a) to (n) of sub-rule (8).] ^17[Provided further that investments made by a member shall, at all times, not be construed as business except when such investments involve client funds or client securities, or relate to arrangements which are in the nature of creating a financial liability on the broker.] (g) ^5[****] (h) he has been at any time expelled or declared a defaulter by any other stock exchange; (i) he has been previously refused admission to membership unless a period of one year has elapsed since the date of such rejection. (2) No person eligible for admission as a member under sub-rule (1) shall be admitted as a member unless :- (a) he has worked for not less than two years as a partner with, or an authorised assistant or authorised clerk or remisier or apprentice to, a member; or (b) he agrees to w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ii) nothing herein shall affect members of a recognised stock exchange which are corporations, bodies corporate, companies or institutions referred to in items ^10[(a) to (n) of sub-rule (8)]]. ^18[Provided further that investments made by a member shall, at all times, not be construed as business except when such investments involve client funds or client securities, or relate to arrangements which are in the nature of creating a financial liability on the broker.] (4) A company as defined in the Companies Act, 1956 (1 of 1956), shall be eligible to be elected as a member of a stock exchange if- (i) such company is formed in compliance with the provisions of section 322 of the said Act; (ii) a majority of the directors of such company are shareholders of such company and also members of that stock exchange; and (iii) the directors of such company, who are members of that stock exchange, have ultimate liability in such company. ^11[****] (4A) A company as defined in the Companies Act, 1956 (1 of 1956), shall also be eligible to be elected as a member of a stock exchange if- (i) such company is formed in c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot less than two designated partners of the 'limited liability partnership' are persons who possess a minimum experience of two years:- (a) in dealing in securities; or (b) as portfolio managers; or (c) as investment consultants.] ^15[(7) Any provident fund represented by its trustees, of an exempted establishment under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), shall also be eligible to be elected as a member of a stock exchange.] ^16[(8) Where the Securities and Exchange Board of India makes a recommendation, the governing body of a stock exchange shall, admit as member the following corporations, bodies corporate, companies or institutions, namely :- (a) the Industrial Finance Corporation, established under the Industrial Finance Corporation Act, 1948 (15 of 1948); (b) the Industrial Development Bank of India, established under the Industrial Development Bank Act, 1964 (18 of 1964); (c) any insurance company granted registration by the Insurance Regulatory Development Authority under the Insurance Act, 1938 (4 of 1938); (d) the Unit Trust of India....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ivatives, except by setting up a separate company which shall comply with the regulatory requirements, such as, networth, capital adequacy, margins and exposure norms as may be specified by the Forward Market Commission, from time to time:" 4 Substituted by the Securities Contracts (Regulation) (Second Amendment) Rules, 2017, w.e.f. 27.06.2017. Prior to substitution it read as under: "Provided further that nothing herein shall be applicable to any corporations, bodies corporate, companies or institutions referred to in items (a) to (n)10 of the proviso to sub-rule (4).];" Footnote in above amendment read as under- "Substituted for "(a) to (k)" by Securities Contracts (Regulation) (Amendment) Rules, 2014, w.e.f.16.1.2014." 5 Omitted by GSR 1070(E) dated 15.11.1988 6 Ibid. 7 Ibid. 8 Inserted by the Securities Contracts (Regulation) (Amendment) Rules, 2003, w.e.f. 28.08.2003. 9 Substituted, ibid. Prior to its substitution, sub-clause (iii) read as under: "(iii) nothing herein shall affect members of a recognized stock exchange permitted under the proviso to clause (f) of sub-rule(1) to suspend the enforcement of the aforesaid clause, for so....