SUB BROKER

a. Registration of Sub Broker

(Circular No. 637 download Ref. No. NSE/MEMB/10917dated June 30, 2008)

Trading Members are requested to note the new procedure applicable for sub broker registration applications from July 1, 2008 and this circular is in replacement to the Exchange Circular reference number: NSE/MEMB/9421 dated August 31, 2007.

1. Members would continue to submit the sub broker registration applications electronically through ENIT (go to sub broker master and click on ‘Fresh’) and ensure that the physical documents are received by the Exchange within 7 days from submission of application in ENIT.

2. In case of non receipt of physical documents by the Exchange within 7 days from submission of application in ENIT, the Reference request number would be rejected in ENIT.

3. Members would be informed through letter and Bill vide FTP to make available in its Exchange Dues Account the processing fee amounting to Rs. 2,000/- plus the applicable service tax for every sub broker registration application. Alternatively, the status of the sub broker registration application would be ‘Documents Received’ in ENIT.

4. In case of any deficiency in the application, the application form would be returned to the member.

5. In case the member desires to resubmit the same application vide ENIT after rectifying the deficiencies then the member needs to go to the sub broker master and click on the ‘Resubmit’ button. The member then needs to enter the ‘ENIT reference request number’ and the details of that sub broker registration application would be displayed. The member needs to check and update the details as required and then submit the same to the Exchange. In such cases of resubmission, the Exchange would not charge the sub broker registration processing fee.

6. In case of complete applications, members would be informed through letter in FTP regarding the applications complete in all respect and for which the requisite SEBI registration fees should be made available in their Exchange dues account.

7. The Exchange would start collecting the SEBI registration fees through debiting the Exchange dues account of the members for sub broker applications which are processed and complete in all respect from the very next day of intimation to the member.

8. In case the amount of SEBI registration fees is not debited from the member’s Exchange Dues Account within 10 days from the date of intimation to the member, then the respective sub broker applications would be returned to the member. In case of resubmission of such applications, the Exchange would process the applications from point 1 considering the application as a fresh application.

9. Status of applicants for which the applicable SEBI registration fees has been collected and recognized by the SRC, would be informed to the members by way of display of ‘Date of recognition’ through ENIT.

10. For cases where applicants is not recognized by SRC or the sub broker registration application has been withdrawn by the member, then the Exchange would not refund the SEBI registration fee collected but such fees would be adjusted towards subsequent sub broker registration application by the same member.

11. After recognition granted by SRC, status of sub broker applications uploaded by Exchange to SEBI would be informed to members by way of display of ‘Upload reference number’ and ‘Upload date’ through ENIT within 3 days of upload by Exchange to SEBI.

12. In case the member applies for withdrawal of the sub broker registration application after its recognition by SRC or for cancellation of the application after it is registered with SEBI, then the member would need to procure the refund of the SEBI registration fees directly from SEBI.

13. On receipt of the sub broker registration certificate from SEBI, the details of registration number and registration date would be made available to the member through ENIT. The physical sub broker registration certificate would be forwarded to the member for onward dispatch to sub broker.

14. Partial or the total amount collected towards SEBI sub broker registration fees would not be adjusted towards any other dues payable to the Exchange.

15. In case the member applies afresh for SEBI registration for sub brokers applications returned to the member who have been derecognized since they were unable to provide necessary clarification as sought by SEBI within the time stipulated by SEBI, then the Exchange would process such applications from point 1 as given in this circular.

Further, the members need to attach the scanned copies and send the physical copies of the following documents as of the latest date along with the sub broker registration application form:

1. Proof of address of the applicant entity (trade name) – This is a mandatory field and the address on the proof needs to match with that of the application. Only the latest Telephone Bill, Electricity bill, valid ration card, valid Passport, valid Driving License and bank statement of the last one month from a Nationalised Bank is acceptable.

2. Proof of experience certificate – This is a mandatory field only in cases where qualification of Individual/Partner/Director is less than HSC. Experience of atleast two years in the capacity of employee/dealer in capital market in the name of Individual/Partner/Director is only acceptable.

3. Documents to be submitted along with print of ENIT application - Formats

4. Model agreement between stock broker and sub broker - Format

(Circular No. 625 with download ref . NSE/MEMB/10577 dated April 10, 2008)

SEBI vide its circular dated December 20, 2007 (ref no.MIRSD/DR1/MK/CIR-15/111600/07) has intimated to the Exchange the procedure to be followed for change in affiliation of Sub-brokers from one member to another member of the Exchange. The procedure to be followed is attached in Annexure 1.

The set of documents required to be submitted to the Exchange is attached in Annexure 2


c. Sub Broker Annual Fees

(Circular No. 606 download Ref. No. NSE/MEMB/9437 dated September 4, 2007)

Members are kindly requested to take note and accordingly forward sub broker annual fees, as per Schedule III of the SEBI (Brokers and Sub-Brokers) Regulations, 1992.


d. Cancellation of Sub Broker

(Circular No. 428 download ref. No. NSE/MEMB/5548 dated October 26, 2004)

The documentary requirements relating to surrender of SEBI registration of sub-brokers are given below:

1. Request from Trading Member for surrender of registration of sub-broker.

2. Application from Sub-broker for surrender of registration, in the format given as Annexure.

Please note that the said format includes a clause requesting to dispense with the procedure laid down in the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 as amended vide SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) (Second Amendment) Regulations 2004 notified on September 2, 2004. The said clause may be retained while making the application at the option of the applicant sub-broker.

3. Copy of public notification intimating the investors/general public of the surrender, issued in the local newspaper where the sub broker’s registered office, Head Office/Corporate office is situated and another in English daily news paper with wide circulation.

4. SEBI registration certificate of the sub-broker in original. In case the original certificate is lost, an affidavit to SEBI in this regard by the concerned trading member and the sub-broker separately on stamp paper of appropriate value, duly notarised.

Trading members are advised to take note of the above and ensure that the aforesaid documents are enclosed while forwarding the surrender requests in respect of the sub-brokers affiliated to them.


e. Withdrawal of sub-broker application

Trading Members wanting to withdraw the sub-broker application already submitted to the Exchange are requested to submit the withdrawal application in the format attached.

 

f. Procedure for Change in Constitution /Status of registered Sub-Broker

As per SEBI Circular no. 439 (download ref no. NSE/MEM/5677) dated December 21, 2004 in case of change in status and constitution of Sub-brokers the Members are required to apply to the Exchange for prior approval of SEBI. Upon receipt of prior approval of SEBI, Trading Members have to apply for cancellation of registration of the Sub-broker who is undergoing change in status and/or constitution and simultaneously for fresh registration of the Sub-broker.


Documents to be submitted seeking prior approval:

1) Covering letter from the Trading Member on its letterhead (duly stamped and signed by the authorised signatory) seeking prior approval of the Exchange for the change in status and/or constitution of its Sub-broker providing the following details:
i) Confirmation that there are no any complaints /arbitration /disciplinary proceeding /investigation /inquiry pending against the Sub-broker with the Exchange,
ii) Confirmation that there in no outstanding fees payable to SEBI for any of their sub-brokers on any Stock Exchange,
iii) Granting of approval by the trading member for the change in status /constitution of the specified registered sub-broker from one form to another (Proprietorship, Partnership Corporate and Reconstitution of Partnership.)

2) Letter from Sub-broker (duly signed and stamped) applying to the Trading Member for the change in status and/or constitution as the case may be providing the following details:
i) Reason for change in status/constitution,
ii) Confirmation that they have no pending dues payable to the Exchange and SEBI,
iii) Confirmation that there are no any complaints /arbitration /disciplinary proceeding /investigation /inquiry are pending against the sub-broker with the Exchange, pending against them,
iv) Undertaking that they would be jointly / severally liable for all liabilities / obligations (including monetary penalties) for violations, if any, of the provisions of the SEBI Act, 1992 and the SEBI (Stock Brokers and Sub-brokers) Rules and Regulations, 1992 that have taken place before the change in status and constitution.
v) Details of current and proposed list of directors/partners and shareholding pattern/sharing ratio of the Sub-broker.


Documents to be submitted upon receipt of prior approval:

1) Covering letter from the Trading Member on its letterhead (duly stamped and signed by the authorised signatory) has to be submitted with subject line ‘Change in Status and/or Constitution of Sub-broker, ___________(name of the sub-broker) while applying for cancellation and fresh registration of sub-broker upon receipt of prior approval of SEBI.

2) Application for cancellation of sub-broker registration as per Exchange Circular No. 428 (download ref. no. NSE/MEMB/5548) dated October 26, 2004.


3) Application for fresh registration of sub-broker registration as per Exchange Circular No. 637 (download ref. no. NSE/MEMB/10917) dated June 30, 2008.