Circular No. 484
Ref : NSE/MEM/6372 July
All Trading Members,
Sub: Multiple Membership of the Exchange
This is in replacement to our circular no. 171, download reference no:
1736 dated June 28, 2000. The current policy regarding multiple membership of
the Exchange has been revised.
It has now been decided that Multiple Membership of the Exchange will be
permitted with the following conditions:
applicant shall be required to identify the Existing trading member with
whom they are associated at the time of making an application.
- For the
purpose of taking any disciplinary actions etc., the associated entities
shall be considered as one single unit. Therefore all the associated
entities would attract similar action by the Exchange.
ensuring financial linkage between the associated entities, the new
applicant should be a subsidiary or the holding company of the existing
trading member Company, with at least 51% shareholding.
In order to take benefit of the scheme the following requirements need to
be complied with by the applicant company and the holding company:
- In the
application for new membership, the applicant shall identify the holding
company or subsidiary company, which is a member of the Exchange.
resolution from the existing trading member corporate for applying for new
membership in the name of the holding / subsidiary company.
- Details of
shareholding pattern of the applicant company. The existing trading member
should be the dominant promoter directly holding at least 51% of the
shareholding of the company or the applicant company should be directly
holding at least 51% of the shareholding in the existing trading member
company and required to be identified as dominant promoter.
- In case of
transfer of membership of holding company, both the companies will be
required to comply with the transfer provisions.
- Majority of
the directors should be appointed by the holding company. The same should
be incorporated in the articles of association of the subsidiary company.
from the existing as well as the applicant subsidiary company that they
may be considered as a single unit for taking any disciplinary action by
case of default or failure of subsidiary company to meet the
dues/obligations towards NSEIL / NSCCL and / or investor grievances &
arbitration awards, the holding
company shall also liable to honour the
obligations of the subsidiary company and such dues / obligations may be
adjusted by appropriation of
security deposits, other monies and any additional deposits paid,
whether in the form of cash, bank guarantee, securities or otherwise of the holding company lying with
the Exchange from time to
- Similarly, in case of default or failure of holding
company to meet the dues/obligations towards NSEIL / NSCCL and / or
investor grievances & arbitration awards, the subsidiary company shall also be
liable to honour the obligations of the holding company and such dues /
obligations may be adjusted by appropriation of security deposits, other monies and any
additional deposits paid, whether in the form of cash, bank guarantee,
securities or otherwise, of the
subsidiary company lying with the Exchange from time to time.
The new applicant company shall be required to take up the combined
membership of Capital Market Segment and Futures Sub-segment of Futures and
Options Segment as in the case of new applicants. The application form for the
same can be obtained from the Membership department.
The Exchange shall continue the present policy of not permitting multiple
memberships by the same set of dominant promoters or entities, which do not
conform to the above guidelines.
The members are requested to be guided by the above policy.
For National Stock Exchange of India Limited.