-
A Trading Member desirous of surrendering its membership of the Exchange
shall send its request in writing in the prescribed format as per
Annexure II.
-
Trading Members shall, before submission of an application for surrender of
membership, be required to comply with all the Pre-requisites for application of
surrender as per follows
:
-
Cancellation of sub-brokers: All sub-brokers affiliated to the surrendering
trading member should either cancel their registration or change their
affiliation to any other trading member.
-
Surrender of all connectivities: VSATs and leased lines connectivities at all
the offices of the surrendering trading members should be surrendered prior to
submission of the application for surrender of trading membership. In cases
where the VSAT is used by the trading member for NSDL operations, such VSATs
would have to be surrendered prior to submission of the application for
surrender of trading membership. The Trading member may apply VSAT in the name
of NSDL if they wish to continue their operations with NSDL.
-
Clearance of all dues: The member is required to clear all the dues towards
NSEIL and NSCCL as well as the obligations in respect of Arbitration awards,
investor complaints, etc. However this provision would not be applicable to
members who have applied for surrender as a result of their disablement due to
non-compliance of capital adequacy requirements for continued admittance to the
trading membership of the Exchange for more than 12 months from the date of
disablement.
-
In respect of an application for surrender from a Trading Member,
-
who has been suspended/ disciplinary action taken by the Exchange /SEBI,
-
in respect of whom any investigation/ action consequent to a default has been
initiated by the Exchange /SEBI,
-
who is falling within the category of “associates” as defined by SEBI,
-
who owes dues to the Exchange/ NSCCL,
-
against whom claims by investors of value of Rs.10 lakhs or more are pending
or any claim for any amount is pending for a period more than 6 months,
-
against whom any other claim /complaint is pending which, in the opinion of
the Exchange/ NSCCL, needs to be resolved by the concerned trading member,
-
whose turnover fees liability to SEBI is still outstanding,
The Exchange shall have absolute discretion in dealing with such applications
and if it decides to process/ accept the surrender application of such trading
member, it may impose additional terms and conditions as it may deem fit.
-
An application for surrender shall not be allowed to be withdrawn unless
permitted by the Exchange at its discretion. However, once the request for
surrender of trading membership is approved, whether communicated to the trading
member or not, no withdrawal of surrender application will be permitted.
-
No trading member, who has surrendered its trading
membership, their partners (in case of partnership firm) and/ or dominant
shareholders (in case of corporates) shall be eligible to be readmitted to the
Trading Membership of the Exchange in any form for a period of one year from the
date of cessation of trading membership (i.e. from the date of approval of
surrender).
-
The application of surrender of trading membership is subject
to fulfillment of the following conditions :
-
Submission of original SEBI registration certificate(s) on
all segments on which the trading member is registered.
-
Submission of proof of payment of SEBI turnover fees.
-
Submission of an undertaking/ declaration that no
investigation/Enquiry/Disciplinary action pending against the trading member or
any of its shareholders/ directors.
-
Submission of details of Directors and shareholders as on
date of surrender application.
-
Penal charges, the interest on dues and late submission
charges to the Exchange and/ or NSCCL in respect of such trading member shall be
levied up to and including the date on which such dues/ interest/ charges are
paid remitted to or appropriated /adjusted by theExchange/NSCCL.
-
In case, a Trading Member desires to withdraw the application
for surrender and the Exchange in its discretion approves the same in writing,
the application and levy of annual subscription, interest and penal charges
shall be as if the Trading Member had not applied for the surrender of trading
membership. All the costs related to the installation of new VSAT(s) will also
be borne by the concerned Trading Member.
-
A notice to public by way of a public notification in newspapers shall be made
by the Exchange. The cost of public notification shall be incurred by the
surrendering trading member at actuals. The time period (from the date of public
notification) given to investors, public, etc. to lodge claims against the
surrendering trading member will be as follows:
| Trading Member Category |
Duration of Public Notification |
| Trading members whose applications are with SEBI for registration, are
SEBI registered but not enabled, enabled but have not traded at all. |
No public notification |
| Trading members who have traded during last 12 months preceding the date
of receipt of surrender application |
2 months |
| Trading members who have not traded during last 12 months preceding the
date of receipt of surrender application |
1 month |
| Trading members who have not traded during last 24 months preceding the
date of receipt of surrender application |
15 days |
-
A letter shall be sent to SEBI seeking pending dues, if any, from member.
-
the expiry of period for receipt of investor claims and on
receipt of intimation of dues amount, if any, from SEBI, the total amount
payable by the member shall be appropriated against Trading Member’s deposits
available with the Exchange / NSCCL and the Trading member will be intimated
accordingly. In case the amount payable exceeds the deposits, the trading Member
would be intimated to bring in the requisite amount within 21 days of
intimation. Upon the failure of the member to do so within 21 days of
intimation, the case shall be referred to the relevant authority for further
action.
-
Upon the application for surrender being approved, the
Exchange shall notify to all the Trading Members the fact of such approval. The
concerned Trading Member, whose application has been approved, shall also be
accordingly informed and also intimated of the terms and conditions subject to
which their surrender has been approved.
-
The interest free security deposits lying with
Exchange/Clearing Corporation shall be refunded to the members after three years
from the date of issue of public notification or on receipt of confirmation from
SEBI regarding cancellation of registration whichever is later. Such refund
shall subject to fulfillment of all dues under Rules/Regulations/Bye-Laws of the
Exchange /NSCCL and circulars issued there under, including arbitration awards
and valid investors/ other grievances/claims against them. In case the amount
payable by the member exceeds the deposits, the trading Member would be
intimated to bring in the requisite amount within 21 days of intimation. Upon
the failure of the member to do so within 21 days of intimation, the case shall
be referred to the relevant authority for further action.
-
Upon acceptance/ approval of surrender of trading membership as aforesaid, the
concerned Trading Members shall not be entitled to any rights or privileges
accorded under the Bye-Laws, Rules and Regulations of the Exchange/ NSCCL, but
shall continue to be liable to meet their liabilities/obligations under the
Bye-Laws, Rules and Regulations of the Exchange/NSCCL.
-
A Trading Member, whose public notification has been issued, has an option to
seek substitution of the interest-free security deposits, details of which are
as follows :
-
Cash component of IFSD may be substituted with the FDRs.
-
Under this scheme, their IFSD would be converted to FDRs with the Clearing Bank
of the surrendering trading member in multiples of 5 FDRs of Rs 1 lakh, one FDR
of Rs. 5 lakhs and one FDR for the remaining amount of deposits with the minimum
retention of at least Rs.5 lakhs in cash with the Exchange/ NSCCL after
fulfillment of all dues under Rules/Regulations/Bye-Laws of the Exchange /NSCCL
and circulars issued there under, including arbitration awards and valid
investors/ other grievances/claims against them. The duration of the FDRs would
be as per written request of the member.
-
Trading members desirous of availing the said facility are required to submit
their request as per Annexure II (C3) to this circular which shall be submitted
along with their application for surrender.
-
A minimum deposit component of Rs.5 Lakhs in cash form will be retained by the
Exchange/ NSCCL in order to meet any dues / obligations falling due immediately.
-
Refund of any part component of the deposits is subject to
the Trading Member :
-
Making payment to SEBI of all the turnover fees, interest payable thereon etc.
as may be applicable to such trading members in respect of all the segments they
have been admitted to.
-
Obtaining confirmation of cancellation of registration from SEBI.
-
Redressing, to the satisfaction of the Exchange, all investors’ complaints and
other grievances pending against the trading member.
-
Making, in respect of arbitration proceedings, suitable arrangements to the
satisfaction of the Exchange so as to meet any obligation that may arise out of
awards that may be made against them.
The release/ refund of any component/ portion of a trading member’s IFSD or any
other monies owing to a surrendering trading member shall be made through the
Trading Member's account with their Clearing Bank. As an alternative, refund may
be made to any another bank account of the trading member provided they furnish
a No Objection Certificate from their Clearing Bank.
-
FDRs furnished by the Trading Member in connection with surrender of trading
membership shall be returned to the Trading Member after three years from the
date of issue of public notification or on receipt of confirmation from SEBI
regarding cancellation of registration whichever is later. Returning FDRs/Bank
Guarantees shall be subject to fulfillment of all dues under
Rules/Regulations/Bye-Laws of the Exchange /NSCCL and circulars issued there
under, including arbitration awards and valid investors/ other grievances/claims
against them. In case there are any un-discharged obligations on account of the
member FDRs/ Bank Guarantees shall be returned after adjusting such liability
from the proceeds of the FDR unless adequate money is deposited against such
outstanding liability.
-
Upon a Trading Member, whose surrender application has been received / approved
by the Exchange, being subsequently declared a defaulter/ expelled by the
Exchange, all the process applicable to that of a surrendered trading member
shall cease ipso facto and the relevant process pertaining to a
defaulter/ expelled trading member shall forthwith commence/ apply.
-
Cessation of membership consequent upon surrender will become final and
effective after refund of deposits provided all the terms and conditions
stipulated by the Exchange/NSCCL are complied with in its entirety. Till
cessation, a Trading Member whose application for surrender has been approved
shall be subject to all the terms and conditions set forth herein or as may be
stipulated/ decided in future from time to time. Approval of surrender of
trading membership shall remain conditional upon due compliance by the concerned
Trading Member with all their obligations under the Rules/Regulations/Bye-laws
of the Exchange/NSCCL, and circulars issued there under, including arbitration
awards and valid investors/ other grievances/claims against them.
-
The Exchange, at its sole discretion, may waive, add, modify or relax one or
more of the above requirements wherever it feels appropriate.