TaxTMI 
TaxTMI 
Inspection of stock brokers by stock exchanges
X X X X Extracts X X X X
X X X X Extracts X X X X
.... regulate the securities market. Till now the stock exchanges were directed to inspect books and accounts and other documents of at least 10% of the active brokers of the stock exchange in a year and institute necessary disciplinary action against brokers whose books of accounts and other documents reveal malpractice. It has now been decided that the exchanges would carry out inspection of at least 20% of the active brokers every year beginning from the financial year 2003-2004. These inspections shall invariably include the subsidiaries of other stock exchanges registered as brokers of your exchange. Exchanges are also directed to work out a transparent criteria for selection of brokers for inspection as well as formulate their inspecti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to cover these areas in detail during their inspection of stock brokers. Exchanges are advised to note that their inspections shall not be limited necessarily to areas listed in the list but also cover any additional areas where the exchanges may deem fit. Yours faithfully, S. V. MURALIDHAR RAO Encl: As above. List of illustrative violations (It may be noted that the list mentioned below is only inclusive and not exhaustive) Sl. No. Description 1. Non maintenance or improper maintenance of prescribed books of accounts. 2. Relating to Contract notes: * Non issue of contract not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n one month from date of receipt of the complaint 7. Non maintenance of client database (Client agreements and Registration forms) 8. Non segregation of client funds and securities: * The member should maintain a separate bank account for clients' funds. * There should be a clear segregation of the client's and the broker's moneys. * The member should keep such records and books of accounts as necessary, to distinguish client's securities from his own securities. 9. &n....