MEMBERSHIP DEPARTMENT

 

                                                                Circular No. 625

 

Ref. NSE/MEM/10577                                                                                 April 10, 2008

 

Dear Members,

 

Sub:     Change in affiliation of Sub brokers

 

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.

 

In case of any clarification, you may contact Mr. Ramakanta Shatpathy/ Ms.Annapurni Parasuraman / Ms.Aarti Khare on 26598247 or Board lines 26598100-14 Extn: 4108 / 4124 / 4107.

 

 

For National Stock Exchange of India Ltd

 

 

Rehana D’souza

Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annexure 1

 

The procedure to be followed in case of change in sub-broker affiliation is as follows:

(a)    Application for change in affiliation to be submitted to the Exchange through the broker with whom affiliation is being sought.

(b)   The Exchange shall ensure and confirm that there is no complaint(s) / action(s) is        /are pending against the sub-broker seeking change in affiliation and the sub-broker has no outstanding fee against it.

(c)    The Exchange shall forward the application complete in all respects to SEBI along with its recommendation (Annexure 2).

(d)   SEBI shall take the change in affiliation on record and effect the changes on the sub-broker certificate.

(e)    The modified certificate shall be dispatched to the Exchange to be handed over to the broker / sub-broker.

(f)     The sub-broker seeking change in affiliation shall be eligible to do business with the old broker till the application is granted approval by SEBI. Thereafter, on grant of approval by SEBI the Exchange shall ensure that affiliation of the sub-broker is changed to new broker with immediate effect.

 

The documents to be submitted for seeking approval for change in affiliation by the sub-brokers in various scenarios are specified in the table given below:

 

S.No

Scenarios

Remarks

Documents to be submitted by the applicant

 

(A)

(B)

(C)

(i)

A sub-broker intends

• The sub-broker shall

(a) Application Form for

 

to discontinue

submit the application for

registration as a Sub-Broker

 

business with one

change in affiliation to the

with SEBI.

 

broker and start

Exchange through the

(b) Recommendation Letter by the

 

business with another

broker with whom

Member with whom affiliation is

 

broker by changing

affiliation is being sought

sought.

 

affiliation.

and Exchange shall

(c) Certified true copy of the agreement between the broker and sub-broker..

 

 

forward the application to

(d) Letter from Sub-broker seeking

 

 

SEBI along-with its

change in affiliation (On the

 

 

recommendation.

letterhead of Sub-broker).

 

 

 

(e) No objection Certificate from

 

 

 

the existing member (On the letter head

 

 

 

of existing Trading member).

 

 

 

(f) Undertaking from Sub-broker

 

 

 

confirming that there is no complaint

 

 

 

/action pending against them (On the

 

 

 

letterhead of Sub-broker).

 

 

 

 

 

 

(g) Original SEBI Certificate.

 

 

 

(In case original SEBI Certificate is lost/

 

 

 

misplaced by sub-broker, affidavit by

 

 

 

the   sub-broker (on stamp paper of

 

 

 

appropriate value) indemnifying SEBI

 

 

 

from possible harm along with a copy

 

 

 

of FIR/ police complaint lodged by the

 

 

 

sub-broker).

 

 

 

(h) Undertaking to the Exchange by the

 

 

 

new Trading Member (On the letterhead

 

 

 

of new Trading Member)

 

 

 

(i) Declaration to the Exchange by the

 

 

 

new Trading Member (confirming that

 

 

 

the sub-broker has not introduced or dealt

 

 

 

with fake, forged, stolen, counterfeit, etc.

 

 

 

shares and securities in the market) (On the

 

 

 

letterhead of new Trading Member)

 

 

 

(j) Format of advertisement to be issued

 

 

 

by the existing Trading Member/Sub- 

 

 

 

broker in  one regional Newspaper and

 

 

 

one English Newspaper.

(ii)

A broker merges /

• The sub-broker affiliated

(a) Application Form for

 

amalgamates with

to merging /

registration as a Sub-Broker

 

another broker or is

amalgamating / acquired

with SEBI.

 

acquired by another

broker entities may either

(b) Recommendation Letter by the

 

broker.

choose to surrender

Member with whom affiliation is

 

 

registration or affiliate

sought.

 

 

with the incoming entity

(c) Certified true copy of the agreement between the broker and sub-broker..

 

 

or any other broker.

(d) Letter from Sub-broker seeking

 

 

• The broker must ensure

change in affiliation (On the

 

 

that all the sub-brokers

letterhead of Sub-broker).

 

 

affiliated to it submit the

(e) No objection Certificate from

 

 

application for change in

the existing member (On the letter head

 

 

affiliation or surrender

of existing Trading member).

 

 

within a period of 15 days.

(f) Undertaking from Sub-broker

 

 

• The application for

confirming that there is no complaint

 

 

surrender of certificate of

/action is pending against them (On the

 

 

registration of sub-broker

letterhead of Sub-broker).

 

 

 

 

 

shall be submitted to the

(g) Original SEBI Certificate.

 

 

exchange through the

(In case original SEBI Certificate is lost/

 

 

existing broker whereas

misplaced by sub-broker, affidavit by

 

 

the application for change

the   sub-broker (on stamp paper of

 

 

in affiliation of sub-broker

appropriate value) indemnifying SEBI

 

 

shall be submitted to the

from possible harm along with a copy

 

 

exchange through the

of FIR/ police complaint lodged by the

 

 

broker with whom

sub-broker).

 

 

affiliation is being sought.

(h) Undertaking to the Exchange by the

 

 

The exchange shall

new Trading Member (On the letterhead

 

 

forward the application for

of new Trading Member)

 

 

surrender / change in

(i) Declaration to the Exchange by the

 

 

affiliation to SEBI for

new Trading Member (confirming that

 

 

approval.

the sub-broker has not introduced or dealt

 

 

 

with fake, forged, stolen, counterfeit, etc.

 

 

 

shares and securities in the market) (On the

 

 

 

letterhead of new Trading Member)

 

 

 

(j) Format of advertisement to be issued

 

 

 

by the existing Trading Member/Sub- 

 

 

 

broker in  one regional Newspaper and

 

 

 

one English Newspaper.

(iii)

A broker applies for

• Sub-brokers affiliated to a

(a) Application Form for

 

surrender.

broker who has applied for

registration as a Sub-Broker

 

 

surrender of registration

with SEBI.

 

 

may apply for change in

(b) Recommendation Letter by the

 

 

affiliation to another

Member with whom affiliation is

 

 

broker or apply for

sought.

 

 

surrender.

(c) Certified true copy of the agreement between the broker and sub-broker..

 

 

• The broker must ensure

(d) Letter from Sub-broker seeking

 

 

that all the sub-brokers

change in affiliation (On the

 

 

affiliated to it submit the

letterhead of Sub-broker).

 

 

application for change in

(e) No objection Certificate from

 

 

affiliation or surrender at

the existing member (On the letter head

 

 

the time broker applies for

of existing Trading member).

 

 

surrender. The application

(f) Undertaking from Sub-broker

 

 

must be submitted through

confirming that there is no complaint

 

 

 

 

 

 

 

the exchange.

/action is pending against them (On the

 

 

• The application for

letterhead of Sub-broker).

 

 

surrender of certificate of

(g) Original SEBI Certificate.

 

 

registration of sub-broker

(In case original SEBI Certificate is lost/

 

 

shall be submitted to the

misplaced by sub-broker, affidavit by

 

 

exchange through the

the   sub-broker (on stamp paper of

 

 

existing broker whereas

appropriate value) indemnifying SEBI

 

 

the application for change

from possible harm along with a copy

 

 

in affiliation of sub-broker

of FIR/ police complaint lodged by the

 

 

shall be submitted to the

sub-broker.

 

 

exchange through broker

(h) Undertaking to the Exchange by the

 

 

with whom affiliation is

new Trading Member (On the letterhead

 

 

being sought. Exchange

of new Trading Member)

 

 

shall forward the

(i) Declaration to the Exchange by the

 

 

application for surrender /

new Trading Member (confirming that

 

 

change in affiliation to

the sub-broker has not introduced or dealt

 

 

SEBI for approval

with fake, forged, stolen, counterfeit, etc.

 

 

 

shares and securities in the market) (On the

 

 

 

letterhead of new Trading Member)

 

 

 

(j) Format of advertisement to be issued

 

 

 

by the existing Trading Member/Sub- 

 

 

 

broker in  one regional Newspaper and

 

 

 

one English Newspaper.

(iv)

A broker undergoes

• Sub-brokers affiliated to a

(a) Application Form for

 

change in control or

broker who has undergone

registration as a Sub-Broker

 

change in status and

change in control/change

with SEBI.

 

constitution / sale /

in status or constitution /

(b) Recommendation Letter by the

 

transfer /

transfer/ sale/

Member with whom affiliation is

 

transmission

transmission , may apply

sought.

 

 

for change in affiliation to

(c) Certified true copy of the agreement between the broker and sub-broker..

 

 

another broker or apply

(d) Letter from Sub-broker seeking

 

 

for surrender

change in affiliation (On the

 

 

• The broker undergoing

letterhead of Sub-broker).

 

 

change must ensure that

(e) No objection Certificate from

 

 

all the sub-brokers

the existing member (On the letter head

 

 

 

 

 

 

 

 

 

affiliated to it submit the

of existing Trading member).

 

 

sub-brokers’ application

(f) Undertaking from Sub-broker

 

 

for change in affiliation or

confirming that there is no complaint

 

 

surrender after the

/action is pending against them (On the

 

 

issuance of prior approval

letterhead of Sub-broker).

 

 

to the broker and before

(g) Original SEBI Certificate.

 

 

the registration of the

(In case original SEBI Certificate is lost/

 

 

incoming broking entity.

misplaced by sub-broker, affidavit by

 

 

The application must be

the   sub-broker (on stamp paper of

 

 

submitted through the

appropriate value) indemnifying SEBI

 

 

exchange.

from possible harm along with a copy

 

 

• Incase the broker expires,

of FIR/ police complaint lodged by the

 

 

the sub-brokers may

sub-broker.)

 

 

change their affiliation

(h) Undertaking to the Exchange by the

 

 

within a period of six

new Trading Member (On the letterhead

 

 

months from the date on

of new Trading Member)

 

 

which the broker ceases to

(i) Declaration to the Exchange by the

 

 

exist or the registration

new Trading Member (confirming that

 

 

will be deemed cancelled.

the sub-broker has not introduced or dealt

 

 

• The application for

with fake, forged, stolen, counterfeit, etc.

 

 

surrender of certificate of

shares and securities in the market) (On the

 

 

registration of subbroker(

letterhead of new Trading Member)

 

 

s) shall be

(j) Format of advertisement to be issued

 

 

submitted to the exchange

by the existing Trading Member/Sub- 

 

 

through the existing

broker in  one regional Newspaper and

 

 

broker whereas the

one English Newspaper.

 

 

application for change in

 

 

 

affiliation of sub-broker

 

 

 

shall be submitted to the

 

 

 

exchange through the

 

 

 

broker with whom

 

 

 

affiliation is being sought.

 

 

 

The exchange shall

 

 

 

forward the application for

 

 

 

surrender / change in

 

 

 

 

 

 

 

 

 

 

affiliation to SEBI for

 

 

 

approval

 

(v)

SEBI takes punitive

• Sub-brokers affiliated to a

(a) Application Form for

 

action against the

broker against whom

registration as a Sub-Broker

 

broker like

punitive action has been

with SEBI.

 

cancellation /

taken, may apply for

(b) Recommendation Letter by the

 

debarred from

change in affiliation to

Member with whom affiliation is

 

securities market or

another broker or apply

sought.

 

the broker is

for surrender The subbrokers

(c) Certified true copy of the agreement between the broker and sub-broker..

 

declared a defaulter

must apply for

(d) Letter from Sub-broker seeking

 

or expelled from

change in affiliation or

change in affiliation (On the

 

exchange.

surrender through the

letterhead of Sub-broker).

 

 

exchange within a period

(e) No objection Certificate from

 

 

of one (1) month from the

the existing member (On the letter head

 

 

date of the SEBI order.

of existing Trading member).

 

 

• The application for

(f) Undertaking from Sub-broker

 

 

surrender of certificate of

confirming that there is no complaint

 

 

registration of subbroker(

/action is pending against them (On the

 

 

s) shall be

letterhead of Sub-broker).

 

 

submitted to the exchange

(g) Original SEBI Certificate.

 

 

through the existing

(In case original SEBI Certificate is lost/

 

 

broker whereas the

misplaced by sub-broker, affidavit by

 

 

application for change in

the   sub-broker (on stamp paper of

 

 

affiliation of sub-broker

appropriate value) indemnifying SEBI

 

 

shall be submitted to the

from possible harm along with a copy

 

 

exchange through the

of FIR/ police complaint lodged by the

 

 

broker with whom

sub-broker).

 

 

affiliation is being sought.

(h) Undertaking to the Exchange by the

 

 

The exchange shall

new Trading Member (On the letterhead

 

 

forward the application for

of new Trading Member)

 

 

surrender / change in

(i) Declaration to the Exchange by the

 

 

affiliation to SEBI for

new Trading Member (confirming that

 

 

approval

the sub-broker has not introduced or dealt

 

 

 

with fake, forged, stolen, counterfeit, etc.

 

 

 

shares and securities in the market) (On the

 

 

 

 

 

 

 

 

letterhead of new Trading Member)

 

 

 

(j) Format of advertisement to be issued

 

 

 

by the existing Trading Member/Sub- 

 

 

 

broker in  one regional Newspaper and

 

 

 

one English Newspaper.

(vi)

The broker or the

• In case the broker or the

(a) Application Form for

 

sub-broker terminates

sub-broker terminates the

registration as a Sub-Broker

 

the agreement.

agreement, the sub-broker

with SEBI.

 

 

may apply for change in

(b) Recommendation Letter by the

 

 

affiliation or surrender

Member with whom affiliation is

 

 

registration.

sought.

 

 

• In case the sub-broker

(c) Certified true copy of the agreement between the broker and sub-broker..

 

 

intends change in

(d) Letter from Sub-broker seeking

 

 

affiliation and broker

change in affiliation (On the

 

 

does not issue NOC, the

letterhead of Sub-broker).

 

 

sub-broker may apply for

(e) No objection Certificate from

 

 

change in affiliation after

the existing member (On the letter head

 

 

completion of one month

of existing Trading member).

 

 

from the date of

(In case the existing member does not issue

 

 

termination of agreement

NOC, the sub-broker may apply for 

 

 

with the proof of request

change in affiliation after completion of one

 

 

to the broker for NOC.

month from the date of termination

 

 

• In case the sub-broker

of agreement with the proof of request to

 

 

terminates the agreement,

the broker for NOC)

 

 

the sub-broker shall

(f) Undertaking from Sub-broker

 

 

submit an application to

confirming that there is no complaint

 

 

the exchange for surrender

/action is pending against them (On the

 

 

of certificate of

letterhead of Sub-broker).

 

 

registration as sub-broker

(g) Original SEBI Certificate.

 

 

and enclose proof of

(In case original SEBI Certificate is lost/

 

 

service of notice for

misplaced by sub-broker, affidavit by

 

 

termination of agreement

the   sub-broker (on stamp paper of

 

 

with the broker.

appropriate value) indemnifying SEBI

 

 

• In case the sub-broker is

from possible harm along with a copy

 

 

not traceable or does not

of FIR/ police complaint lodged by the

 

 

 

 

 

 

 

 

either apply for change in

sub-broker).

 

 

affiliation or surrender

(h) Undertaking to the Exchange by the

 

 

after termination of

new Trading Member (On the letterhead

 

 

agreement by the broker,

of new Trading Member)

 

 

the broker may submit an

(i) Declaration to the Exchange by the

 

 

application for surrender

new Trading Member (confirming that

 

 

of registration along with

the sub-broker has not introduced or dealt

 

 

proof of service of notice

with fake, forged, stolen, counterfeit, etc.

 

 

to the sub-broker after a

shares and securities in the market) (On the

 

 

period of one month from

letterhead of new Trading Member)

 

 

the date of termination of

(j) Format of advertisement to be issued

 

 

agreement.

by the existing Trading Member/Sub- 

 

 

 

broker in  one regional Newspaper and

 

 

 

one English Newspaper.

(vii)

Broker undergoes a

• The sub-brokers may only

• The sub-brokers may only submit

 

change in name.

submit certificate of

certificate of registration in original for

 

 

registration in original for

the change in affiliating broker’s name to be

 

 

the change in affiliating

recorded on certificate.

 

 

broker’s name to be

 

 

 

recorded on certificate.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annexure 2

 

 

1.)

FORM B

SECURITIES AND EXCHANGE BOARD OF INDIA

(Stock Brokers and Sub-Brokers) Regulations 1992

(Regulation 11)

APPLICATION FORM FOR REGISTRATION AS A SUB-BROKER

WITH SECURITIES AND EXCHANGE BOARD OF INDIA

 

1. Name of applicant sub-broker:

2. Trader name of sub-broker, firm, corporate body.

3. Form of organisation - sole proprietorship, partnership, corporate body. Please give names of proprietor, all partners, directors etc.

 

4. Educational qualifications of proprietor, partners, directors etc.

Name                           Status                           Qualifications

 

5. Name of the member-broker and the Stock Exchange to which applicant is affiliated.

 

6. Date of acquiring sub-broker ship

 

7. Infrastructural arrangements - indicate fax, telex, phones, number of offices and residential numbers. Also indicate the number of employees.

Office Address

Phone No

Telex No

Fax No

Residential phone nos. of proprietor, partners, directors etc.

8. Number of branch offices and their location with phone, telex and fax numbers

 

I certify that the information given in this application form is true to the best of my/our knowledge and belief.

 

Recommendation letter from the stock broker to whom I/we am/are affiliated and two references, including one from the banker as required are enclosed.

 

Signature  _________________

Date ________________

 

                                                      


2.)

FORM C

SECURITIES AND EXCHANGE BOAD OF INDIA

(Stock Brokers and Sub-Brokers) Regulation 1992

 

RECOMMENDATION LETTER BY THE MEMBER WITH

WHOM AFFILIATION IS SOUGHT

 

To,

The National Stock Exchange

 

Dear Sirs,

 

I/We understand that __________________ son of _________ aged __ years, residing at ______________________ and attached to me at ______________ for carrying on the shares and securities business as a sub-broker. I/we confirm that ____________ is transacting business through me for a period from _______________ and he is a fit and proper person to be registered as a sub-broker.

 

I/We also confirm that he is known to me/us for well over ____ years and he has got good financial background, moral character and integrity. He has been transacting business frequently and was meeting the market commitments as and when they arise.

 

I/We hereby recommend his application for granting registration for carrying on shares and securities business as sub-broker. I/We also wish to state that whatever the information that has been submitted is true to the best of my/our knowledge and if at a later date if any material information comes to my/our knowledge subsequent to the submission of this application, I/We undertake to keep informed about the same.

 

I/We member/s of ___________________ Exchange hereby agree to recommend the above mentioned applicant.

 

Yours faithfully

 

 

Signature of Member/s

 

 


 

 

3.)

STOCK BROKER AND SUB-BROKER AGREEMENT

 

This Agreement entered into this _______ day of ________ 200_ at ________ between

__________________, Member of the _____________ Stock Exchange, ordinarily carrying on business in sale and purchase of shares and securities in the name and style of

____________ from ___________________ (hereinafter referred to as "the stock broker") and having his/its office/registered office at … … … … … … … .(address), which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include his/her heirs, executors, administrators and legal representatives/the partners for the time being of the said entity, the survivor or survivors of them and their respective heirs, executors, administrators and legal representatives/its successors, as the case may be, of the One Part;

And

_______________ an entity desiring to start business as a sub broker in shares and

securities in the name and style of ____________ (hereinafter referred to as "the subbroker".) and having his/its office/registered office at … … … … … … (address), which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include his/her heirs, executors, administrators and legal representatives/the partners for the time being of the said entity, the survivor or survivors of them and their respective heirs, executors, administrators and legal representatives/its successors, as the case may be, of the Other Part;

 

WHEREAS the said stock broker is a member of ___________ Stock Exchange

{(hereinafter referred to as "the said exchange"} and also holds a certificate of registration granted under Rule 4 of the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Rules, 1992 (hereinafter referred to as "the said Rules) & the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as "the said Regulations"); bearing SEBI Registration Number.---------------------

AND

WHEREAS the sub-broker is desirous of affiliating to the stock broker and is hereby

eligible for making an application for seeking recognition of the stock exchange and for

grant of a certificate of registration under rule 5 of the said rules;

 

WHEREAS in terms of item (C) (4) the Code of Conduct for sub brokers prescribed under of Schedule II read with regulation 15 (1) (c) and regulation 17(1) (m) of the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992, the stock broker and the sub-broker are required to enter into an agreement with each other specifying the scope of their authority & responsibility, in relation to the business of dealing in securities between them; AND

 

WHEREAS the sub-broker has declared:

(a) that he/it is presently affiliated as a sub broker with the stock broker(s) of the

following stock exchanges other than the said exchange:

 

 

Name of the

affiliated stock

broker

 

Name of the

stock exchange

 

SEBI Registration

number of the stock

broker

 

SEBI Registration

number of the sub

broker

 

 

 

 

 

 

and the broker(s) mentioned under column (1) of the above table has/have given ‘No

Objection Certificate(s)(NOC)’ to the present Sub-broker to get affiliated to the stock

broker & seek recognition with the said exchange and registration with SEBI.

 

(b) that he is not affiliated to any other stock broker of the said exchange; and

 

(c) that he/it has direct/indirect interest in the stock brokers/ sub brokers of stock exchange

detailed hereunder:

 

Name & SEBI Reg.

No. of Broker(s)

directly or indirectly

related to the subbroker

 

Name & SEBI Reg.

No. of sub broker(s)

directly or indirectly

related to the sub

broker

 

Name & SEBI

Reg. No. of

broker(s) with

whom the sub

broker mentioned

at column (2) is

affiliated

 

Name of

the stock

exchange

 

Nature of

interest (i.e. as

director or

shareholder)

Also state % of

shareholding

 

 

 

 

 

 

 

Note 1: A Sub-broker is deemed to have direct/indirect interest in other Sub-broker (Stock Broker) for purposes of this clause, in the following circumstances:

 

(i) Where he is an individual, he or any of his relatives being a Sub-broker (Stock

     Broker), he or any of his relative being partner in a Sub-Broking firm (Stock Broking

     Firm), he or any of his relative being a director in a Sub-broking Company (Stock

     Broking Company) or he or any of his relatives clubbed together holding substantial

     equity in any Sub-broking Company.

 

(ii) Where it is Partnership Firm/Company, the relative(s) of partners/directors in the

      Firm/Company being a Sub-broker (Stock Broker) or being partner(s)/director(s) in a

      Sub-broking Firm/Company (Stock Broking Firm/Company) or the same set of

      shareholders holding substantial equity in other Sub-broking(Stock Broking) entity.

 

Note 2 : Relative for the above purpose shall mean husband, wife, brother, unmarried sister or any linear ascendant or descendent of an individual.

 

 

NOW THEREFORE this agreement witnesseth as follows:

 

  1. The stock broker and the sub broker hereby acknowledge and confirm that the sub     broker is affiliated to the stock broker and that the sub-broker shall within the scope of the authority given under these presents, be entitled to act as a ‘sub-broker’ within the meaning and subject to SEBI (Stock Brokers & Sub-Brokers) Rules, 1992 and SEBI (Stock Brokers & Sub-Brokers) Regulations 1992 (the said “Rules” and “Regulations” respectively) as amended from time to time, for assisting the client in buying, selling or dealing in securities through the stock broker.
  2. The stock broker and the sub broker agree that irrespective of the date of agreement, the sub broker will commence business only after receipt of registration certificate from SEBI, continue business during currency of the certificate and will stop business as a sub broker from the date of termination of the agreement.
  3. The stock broker agrees that he/it shall not, except with the previous consent of the sub-broker, commit on the latter's behalf transactions in securities in excess of the amount mutually agreed upon in writing from time to time. The sub broker also agrees that he/it shall not commit transactions in securities through the stock broker in excess of the amount mutually agreed upon in writing from time to time.
  4. The stock broker agrees that he/it shall not resort to unfair means of weaning away the clients of the sub broker.
  5. The stock broker and the sub broker agree to share the brokerage/commission between them in terms of their mutual understanding. Provided however, the brokerage/commission payable to the sub-broker shall not exceed one and one half percent of the value of transactions carried out by the sub broker for clients.
  6. The stock broker agrees to maintain a separate record including accounts in respect of the dealings in securities entered into on behalf of the individual client’s dealing, with bifurcation showing the details by each of the sub brokers.
  7. If any dispute arises between the stock broker and the sub-broker, the same shall as far as possible be settled with the help of the officials of the said exchange and if no such settlement is possible the parties hereby agree to refer such dispute to arbitration in accordance with the Rules, Bye-laws and Regulations of the said exchange. The stock broker and the sub-broker hereby agree that they shall cooperate with the said exchange officials and provide all relevant documents in their possession or control so as to expedite the settlement or adjudication through arbitration process.
  8. The sub-broker shall inform the stock broker of any proposed material change in its status and constitution, before seeking prior approval for the same from SEBI.
  9. The sub broker agrees not to carry on securities business either directly or through his/its relatives otherwise than on behalf of the stock broker.
  10. The sub-broker agrees not to issue any documents like bill, confirmation memo, statement of funds/securities in any other capacity except as authorized by the stock broker.
  11. The sub broker agrees to produce copies of transactions of Statement of DP and bank accounts belonging to himself/itself and his/its relatives whose accounts have been registered with the stock broker on demand.
  12. The sub broker agrees that the stock broker be authorized to establish additional internal controls like deposit, verification of identity of clients registered, review of transactions in respect of clients contributing large volumes, power to scrutinize the documents relating to the authorized person, etc., at any time during the period of the agreement in force.
  13. The sub broker agrees that he would display at each of his branch, in prominent location, Display Board provided by the Trading Member which would contain guidelines to investors including particulars of Trading Member, Compliance Officer Details, manner of payment/receipt of funds and securities.
  14. In case of receipt of complaint/s from the investors revealing activities by the sub broker otherwise than the manner authorized by Trading Member, the sub broker agrees that the stock broker would be entitled to withhold money due to the sub-broker, till the complaints are resolved.
  15. The sub broker agrees that the stock broker would be entitled to establish any other additional control that it desires to ensure safe and secure dealing of investors with the sub broker.
  16. The stock broker and the sub-broker shall be entitled to terminate this agreement without giving any reasons to the other party after giving notice in writing of not less than one month to the other party at its respective address mentioned below. Provided however that, in the event of the sub broker terminating the agreement and/or termination of the sub broker by the stock broker, for any reason whatsoever, all his clients shall be deemed to be the direct clients of the stock broker and all clauses in the tripartite agreement between the stock broker, the sub broker and client governing the client and stock broker shall continue to be in force as it is, unless any client intimates to the stock broker or the stock broker intimates to the client his/its intention to terminate the agreement by giving a notice in writing of not less than one month.
  17. Where the stock broker has terminated his/its agreement with the sub broker, the stock broker shall inform the relevant stock exchange (s).
  18. This agreement shall forthwith stand terminated;
    • if the stock broker for any reason ceases to be a member of the stock exchange including by cessation of membership by reason of the stock broker's, death, resignation, expulsion or having being declared a defaulter or if the certificate issued by the Board is cancelled;
    • upon the demise/insolvency of the sub-broker or the cancellation of his/its registration with the Board or /withdrawal of recognition of the sub-broker by the stock exchange.
  19. On termination of the agreement by the stock broker, it shall be the duty of the stock broker to collect and forward the registration certificate of the sub-broker to SEBI through the stock exchange along with all the fees in arrears in respect of the sub broker’s registration as required under Part II of schedule III of SEBI (Stock Broker and Sub-broker) Regulations 1992 and the sub-broker agrees to co-operate with the stock broker in carrying out the said duty.
  20. In the event of surrender of the sub broker registration, the affiliating broker shall ensure that investors/general public are informed about surrender of registration of the sub broker. A public advertisement to that effect shall be required to be issued by the stock broker in a 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.

 

IN WITNESS WHEREOF, the parties hereto have set their hands and signatures on the day, month and year first above written.

 

 

 

 

4.)

(On the letterhead of the Sub-broker)

 

Letter from Sub-broker seeking change in affiliation.

 

 

To,                                                                                                                   Date:

Securities and Exchange Board of India

SEBI Bhavan,

Plot No. C4-A,

G Block, Bandra-Kurla Complex,

Mumbai – 400 0051

 

Dear Sir,

 

Sub:     Change in affiliation.

 

 

I / We ---------------------------, Proprietor / all Partners / All Director of --------- (Trade Name of Sub-broker) (SEBI Reg. No. ---------------) having registered office at ------------------------------, am/are affiliated to ----------- (Existing Member name), member of the National Stock Exchange of India Ltd.

 

I/We wish to disaffiliate from the said trading member M/s. _____________. Further, I/We wish to affiliate myself / ourselves with M/s. __________________(name of trading member with whom affiliation is being sought) being a member of the Exchange.

 

In view of the above, you are requested to change my/our affiliation from ___________(name of existing trading member) to ________ (name of the trading member with whom affiliation is being sought).

 

 

Yours faithfully,

 

 

Signature of Director/Partner/Individual

 


5.)

(On the letterhead of the Existing Trading Member)

 

No objection Certificate from the existing member.

 

 

To,                                                                                                                   Date:

Securities and Exchange Board of India

SEBI Bhavan,

Plot No. C4-A,

G Block, Bandra-Kurla Complex,

Mumbai – 400 0051

 

Dear Sir,

 

Sub :    Change in affiliation of Sub-broker.

 

 

I/We would like to state that I/We have no objection on______________(name and registration no. of the sub-broker) being affiliated with some other trading member.

 

Yours faithfully,

For(name of trading member)

 

 

Authorised Signatory

(Name & Designation)

SEBI Registration No.

 


6.)

(On the Letterhead of the Sub-broker)

 

Undertaking from Sub-broker confirming that there is/are no pending complaint(s)/action(s)/outstanding fees

                                                                                                           

To,                                                                                                      Date

National Stock Exchange of India Ltd.

Exchange Plaza

Bandra Kurla Complex

Bandra (East)

Mumbai-400051.

 

I / We ---------------------------, Proprietor / all Partners / All Director of --------- (Trade Name of Sub-broker) (SEBI Reg. No. ---------------) having registered office at ------------------------------, affiliated to ----------- (Existing Member name), member of the National Stock Exchange of India Ltd. confirm that there is/are no complaint(s) or action(s) pending against me/us /any of our partners/any of  our directors.

 

Further we confirm that there are no outstanding fee payable to SEBI.

 

 

For M/s----------

 

 

 

 

Signature

Name

Proprietor / All Partners / All Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7.)

Affidavit in case of lost/misplacement of SEBI Certificate

 

DEED OF INDEMNITY cum AFFIDAVIT

(on stamp paper of appropriate value)

 

THIS DEED of INDEMNITY cum AFFIDAVIT made on this _____ the day of 200__  by M/s. __________(name of Sub-broker)  having registration no.______________ affiliated with ______________(name of trading member), a Trading Member of the National Stock Exchange of India Ltd (“NSEIL”) give this INDEMNITYcum AFFIDAVIT at _______________ IN FAVOUR of Securities and Exchange Board of India., (hereinafter called as “SEBI” which expression shall unless repugnant to the context or meaning thereof include its successors, assigns and legal representatives)

 

WHEREAS

 

1.      I /we have sought to change my/our affiliation from ____________(name of existing trading member) to ___________(name of trading member with whom affiliation is being sought)being member of the Stock Exchange and have applied for the same.

2.      I/we are required to submit the original SEBI Registration Certificate(s) for forwarding to SEBI through NSEIL to change my / our affiliation.

3.      I / we have misplaced / lost our SEBI Registration Certificate(s).

4.      As required by SEBI, I/we therefore am/are willing to execute this Indemnity cum  Affidavit for the purpose of facilitating change of affiliation by SEBI without the original certificate of registration.

 

NOW  IN CONSIDERATION OF SEBI permitting us to furnish the application for change of affiliation without the original certificate of registration, I/WE UNCONDITIONALLY AND IRREVOCABLY UNDERTAKE AND AGREE

a)      To deliver the original SEBI Registration Certificate to SEBI as soon as the same is

      found, recovered or possessed by us.

 

b)      That I agree to protect, indemnify and keep indemnified SEBI harmless from and against all claims, demands, actions, proceedings, losses, damages, liabilities, costs, charges, expenses or obligations which may be brought or commenced against them or which they may or may have to bear, pay or suffer directly or indirectly as a result of such loss or damage arising as a result of any other person claiming to be the holder of the said SEBI Registration Certificate  bearing  Registration No. ___________

c)      That this Undertaking shall be binding upon our successors, legal representatives and assigns.

d)      That we shall execute, sign, and subscribe, to such other documents, papers, agreements, covenants, bonds, and / or undertakings as may be prescribed or required by SEBI from time to time.

 

IN WITNESS WHEREOF, this Deed of Indemnity cum Affidavit is executed on this the ______ day of __________ 20__.

 

 

Signed and delivered

For M/s. (name of sub-broker)

 

 

Name and Designation

in the presence of

WITNESSES

 

Signature

 

(1)        Name               :

            ADDRESS

 

Signature

 

(2)        NAME             :

            ADDRESS

 

                                                                                                            Before me

            Notary 

 

 

 

 

 

 

 

 

 

 

 

 

8.)

(On the letterhead of new Trading Member)

 

 

Undertaking to the Exchange by the new Trading Member

 

To,         

National Stock Exchange of India Ltd.

Exchange Plaza

Bandra Kurla Complex

Bandra (East)

Mumbai-400051.

 

Dear Sirs,

 

Sub. : Registration of my/our Sub-broker M/s.___________

 

I/We hereby  undertake to comply with and abide by all the requirements of SEBI  (Stock Brokers and Sub-Brokers)  Regulation  1992 as well as  all the requirements of NSEIL in this regard as may be laid down from time to time.

 

I/We further undertake to ensure the settlement and honour of all the deals entered into by us as the trading member of  the exchange which  orders/deals may  have  originated from M/s._________________ whom we are recommending to NSEIL/SEBI to be accorded recognition as our sub-broker.

 

In the event of   failure or otherwise of M/s.___________ to settle  and honour  the  deals entered  into  by the said sub-broker  i.e. M/s. ____________ through me/us, we shall be liable to discharge the obligations/liabilities arising out of the said transactions.

 

Yours faithfully

 

 

Signature of the trading member

(SEBI Regn.No.:_______)

 


9.)

(On the letterhead of new Trading Member)

 

 

Declaration to the Exchange by the new Trading Member

 

The Membership Department

National Stock Exchange of India Ltd. (NSEIL)

Exchange Plaza

Bandra Kurla Complex

Bandra (East)

Mumbai-400051.

 

Dear Sir,

 

Sub: Registration of my/our Sub-broker M/s.___________.

 

This has reference to our recommendation of M/s. _________________ as our sub-broker to the NSEIL for registration of their application with the SEBI.

 

In this regard, I/We hereby declare and confirm that M/s. __________________ has not, at any time in the course of his/their business with us, introduced or otherwise dealt with fake, forged, stolen, counterfeit, etc. shares and securities in the market.

 

I/We further undertake that if at a later date any additional material information in this regard comes to my knowledge, I/We shall forthwith communicate the same to the Exchange in writing.

 

Date: ______________                       _________________________________________

Place: ______________                      Name, Signature & Seal *

                                                            (SEBI Regn. no. ______________)

                                                                                               

* Should be signed by the Proprietor/Partner/Director of trading member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.)

(On the letterhead of new Trading Member)

 

Details by the new trading member

 

To,

The Membership Department

National Stock Exchange of India Ltd.

Exchange Plaza

Bandra Kurla Complex

Bandra (East)

Mumbai-400051.

 

Dear Sir,

 

Sub.:

 

This has reference to our recommendation of M/s._________ as our sub-broker to the NSEIL for registration of their application with the SEBI.

 

In this regard, I/We hereby declare and confirm that M/s._______ has in the course of his/their business with us, introduced or otherwise dealt with fake, forged, stolen, counterfeit etc. shares and securities in the market, details of which are as follows :

 

Security Details       Exchange on which introduced           Settlement No. (period)

 

 

 

 

 No. of shares                      Amount                         Reasons for return      

 

 

 

 

Action taken., whether defect           Explanation given by sub-broker applicant

 rectified(Give details)                                                           (Give details)     

 

    

 

                                                            

                 I/We further undertake that if at a later date any additional material information in this regard comes to my/our knowledge, I/We shall forthwith communicate the same to the Exchange in writing.

 

Date: ______________                       _________________________________________

Place: ______________                      Name, Signature & Seal *

                                                            (SEBI Regn. no. ______________)

                                                                                               

* Should be signed by the Proprietor/Partner/Director of trading member

 

11.)

Format of advertisement to be issued by the Trading member

 

Name and Address of Trading member

 

NOTICE

 

This is to inform that I/We, M/s.___________(name of the trading member) SEBI Registration No._____________ have initiated the process of disaffiliating SEBI registration of our following Sub-broker(s) trading in NSE  on their request.

 

Sr. No.  Name of the Sub-Broker(s)           SEBI Regn. No.

 

 

 

Investors dealing with above sub-broker(s) are advised to take note of the same.

 

Please note that the sub-broker(s) will be affiliated to us till final approval from SEBI.

 

Date :                                         

                                                      (Name of Trading Member)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.)

Format of advertisement to be issued by the Sub-broker

 

Name and address of Sub-broker

 

NOTICE

 

This is to inform that I/We, _______________ (name and registration number of               sub-broker) have initiated the process for disaffiliation from _____________(name of existing trading member).

 

This is for the information of investors dealing with the above sub-broker.

 

Please note that we will be affiliated to the member till final approval from SEBI.

 

Date :                                                                             (Name of  Sub-broker)