TaxTMI 
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
....less 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 work for a minimum period of two years as a partner or representative member with another member and to enter into bargains on the f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ade 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 compliance with the provisions of section 12 of the said Act; (ii) such company undertakes to comply with such financial requirements and norms as may be specified by the Securities and Exchange Board of India for the registration of such company under sub-section (1) of section 12 of the S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cellaneous 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, established under the Unit Trust of India Act, 1963 (52 of 1963); (e) the Industrial Credit and Investment Corporation of India, a company registered under the Companies Act, 1956 (1 of 1956); (f) the subsidiaries of any of the corporations or companies specified in clauses (a) to (e) and any subsidiary of the State Bank of India or any nationalised bank set up for providing merchant banking services, buying and selling securities and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 long as such suspension is effective, except that no member of such exchange shall engage in forward business of any kind whether in goods or commodities or otherwise and, if actually so engaged on the date of such application, he shall sever his connection with any such business within a period of three years from the date of the grant of recognition." 10 Substituted for "items (a) to (n) of the proviso to sub-rule (4)", by the Securities Contracts (Regulation) (Second Amendment) Rules, 2017, w.e.f. 27.06.2017. Prior to this, Substituted "(a) to (k)" by Securities ....