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Eligibility Criteria


The following are eligible to apply for membership subject to the regulatory norms and provisions of SEBI and as provided in the Rules, Regulations, Byelaws and Circulars of the Exchange -

Criteria
Status Indian Citizen
Age Minimum age : 21 years
Education At least HSC or equivalent qualification
Experience Applicant should have an experience for not less than two years as a partner with, or an authorised assistant or authorised clerk or remisier or apprentice to, a member.

Where the applicant is a partnership firm, the applicant shall identify a Dominant Promoter Group as per the norms of the Exchange at the time of making the application. Any change in the shareholding of the partnership firm including that of the said Dominant Promoter Group or their sharing interest shall be effected only with the prior permission of NSE/SEBI.

Criteria
Status Registered Partnership firm under Indian Partnership Act, 1932
Designated Partners Identify at least two partners as designated partners who would be taking care of the day to day management of the partnership
Age Minimum age of designated partner(s) : 21 years
Designated Partners Education Designated Partners should be at least HSC or equivalent qualification
Designated Partners Experience Should have a minimum of 2 years experience in an activity related to dealing in securities or as portfolio manager or as investment consultant or as a merchant banker or in financial services or treasury, broker, sub broker, authorised agent or authorised clerk or authorised representative or remisier or apprentice to a member of a recognised stock exchange, dealer, jobber, market maker, or in any other manner in dealing in securities or clearing and settlement thereof.
Dominant Promoter Norms Identify partner's sharing interest as per Exchange DPG norms

Dominant Promoter Norms (.doc)

A Limited Liability Partnership as defined in the Limited Liability Partnership Act, 2008 (6 of 2009), shall be eligible to be admitted as a member of a Stock Exchange if:

  • such 'limited liability partnership' undertakes to comply with such financial requirements and norms as may be specified by the Securities and Exchange Board of India for the registration of such limited liability partnerships under sub-section (1) of section 12 of the Securities and Exchange Board` of India Act, 1992 (15 of 1992);
  • the designated partners of the 'limited liability partnership' are not disqualified from being members of a stock exchange under sub-rule (1) of rule 8 [except sub-clauses (b) and (f) thereof] or sub-rule (3) of rule 8 [except sub-clauses (a) and (f) thereof] of the Securities Contracts (Regulation) Rules, 1957 and the designated partners of the 'limited liability partnership' had not held the offices of Directors in any company or body corporate or partner in any firm or 'limited liability partnership', which had been a member of the stock exchange and had been declared defaulter or expelled by the stock exchange
CRITERIA
Status Registered Limited Liability Partnership under Limited Liability Partnership Act, 2008
Designated Partners Identify at least two partners as designated partners who would be taking care of the day to day management of the limited liability partnership
Age Minimum age of designated partner(s) : 21 years
Designated Partners Education Designated Partners should be at least HSC or equivalent qualification
Designated Partners Experience Should have a minimum of 2 years� experience in an activity related to dealing in securities or as portfolio managers or as investment consultants
Dominant Promoter Norms Identify partner's sharing interest as per Exchange DPG norms

Corporations, Companies or Institutions or subsidiaries of such Corporations, Companies or Institutions set up for providing financial services;

A Company as defined in the Companies Act, 1956 (1 of 1956), shall be eligible to be admitted as a member of a Stock Exchange provided:

  • such company is formed in compliance with the provisions of Section 12 of the said Act;
  • it undertakes to comply with such other financial requirements and norms as may be specified by the Securities and Exchange Board of India for the registration of such company under sub-section (1) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);
  • The directors of such company are not disqualified for being members of a stock exchange under clause (1) of rule 8 [except sub-clauses (b) and (f) thereof] or clause (3) of rule 8 [except sub-clauses (a) and (f) thereof] of the Securities Contracts (Regulation) Rules, 1957 and the directors of the company had not held the offices of the directors in any company which had been a member of the stock exchange and had been declared defaulter or expelled by the stock exchange
CRITERIA
Status Corporate registered under The Companies Act, 1956 (Indian)
Minimum Paid up Equity Capital  30 lakhs
Designated Directors Identification of at least two directors as designated directors who would be managing the day to day trading operations
Age Minimum age of designated director(s) : 21 years
Education Each of the Designated Directors should be at least HSC or equivalent qualification
Designated Directors Experience Should have a minimum of 2 years experience in an activity related to dealing in securities or as portfolio manager or as investment consultant or as a merchant banker or in financial services or treasury, broker, sub broker, authorised agent or authorised clerk or authorised representative or remisier or apprentice to a member of a recognised stock exchange, dealer, jobber, market maker, or in any other manner in dealing in securities or clearing and settlement thereof.
Dominant Promoter Norms Identify dominant group as per Exchange DPG norms

Dominant Promoter Norms (.doc)

The following persons are eligible to become PCMs of NSE Clearing provided they fulfill the prescribed criteria:

  • SEBI Registered Custodians; or
  • Banks recognised by NSE/NSE Clearing for issuance of bank guarantees

Further to Circular No: 648 with Download No: NSE/MEMB/11148 dated August 19, 2008, the eligibility membership criteria for banks in the Currency Derivatives segment is as follows:

Banks authorized by the Reserve Bank of India under section 10 of the Foreign Exchange Management Act, 1999 as �AD Category - I bank� are permitted to become trading and clearing members of the currency futures market of the recognized stock exchanges, on their own account and on behalf of their clients, subject to fulfilling the following minimum prudential requirements:

Minimum net worth of  500 crores.

Minimum CRAR of 10 per cent.

Net NPA should not exceed 3 per cent.

Made net profit for last 3 years.

The AD Category - I banks which fulfill the prudential requirements are required to lay down detailed guidelines with the approval of their Boards for trading and clearing of currency futures contracts and management of risks.

AD Category - I banks which do not meet the above minimum prudential requirements and AD Category - I banks which are Urban Co-operative banks or State Co-operative banks can participate in the currency futures market only as clients, subject to approval therefore from the respective regulatory Departments of the Reserve Bank.

BMC for Commodity Derivatives segment will be as follows:

Trading Member (TM) Trading cum Self-Clearing Member (TMSCM) Trading cum Clearing Member (TMCM) Professional Clearing Member (PCM)
Non-algo Algo Non-Algo Algo Non-Algo Algo
10 50 10 50 25 50 -

Note:

  • Cash and cash equivalent in ratio of 1:3
  • NO Exposure on BMC

Membership of New Debt Segment Click Here

At any point of time the applicant has to ensure that either the proprietor/one designated director/partner or the Compliance Officer of the applicant entity should be successfully certified either in Securities Market (Basic) Module or Compliance Officers (Brokers) Module or the relevant module pertaining to the segments wherein membership of the Exchange has been sought.i.e.

  • Capital Market (Dealers) Module
  • Derivatives Market (Dealers) Module
  • National Institute of Securities Markets (NISM) Series I � Currency
  • Derivatives Certification Examination

The above norm would be a continued admittance norm for membership of the Exchange.

The Exchange may specify such standards for investor service and infrastructure with regard to any category of applicants as it may deem necessary, from time to time.

SEBI vide circular No. CIR/MRD/DRMNP/36/2012 dated December 19, 2012 has enhanced the requirement of BMC for trading members with a view to realign the BMC requirements with the risk profiles of the stock brokers / trading members in cash / derivative segment of the stock exchange. The revised BMC requirements as prescribed by SEBI vide their aforesaid circular are given below:-

Sr.No. Categories Base Minimum 
Capital Deposit 
(in Rs. lakhs)
1 Only Proprietary trading without Algorithmic trading (Algo) 10
2 Trading only on behalf of Client (without proprietary trading) and without algo 15
3 Proprietary trading and trading on behalf of Client without Algo 25
4 All Trading Members/Brokers with Algo 50

The Base Minimum Capital primarily shall be blocked from NSE deposits of Capital Market segment. In case the NSE deposits of Capital Market segment are not enough to cover the BMC requirement, NSE deposits of Futures & Options segment and Currency Derivatives segment shall also be utilised towards the same.

The amount blocked towards BMC will not be allowed for taking exposure on trades.

Explanation (.pdf)

Further to the capital and network requirements, No entity shall be admitted as a member/partner or director of the member if

  • It has been adjudged bankrupt or a receiver order in bankruptcy has been made against him or he has been proved to be insolvent even though he has obtained his final discharge;
  • it has compounded with his creditors for less than full discharge of debts;
  • it has been convicted of an offence involving a fraud or dishonesty;
  • it is engaged as a principal or employee in any business other than that of Securities, except as a broker or agent not involving any personal financial liability or for providing merchant banking, underwriting or corporate or investment advisory services, unless he undertakes to severe its connections with such business on admission, if admitted;
  • it has been at any time expelled or declared a defaulter by any other Stock Exchange or he has been debarred from trading in securities by an Regulatory Authorities like SEBI, RBI etc;
  • it incurs such disqualification under the provisions of the Securities Contract (Regulations) Act, 1956 or Rules made there-under so as to disentitle such persons from seeking membership of a stock exchange;
  • it incurs such disqualification consequent to which NSE determines it to be not in public interest to admit him as a member on the Exchange, provided that in case of registered firms, body corporates and companies, the condition from (will apply to, all partners in case of partnership firms, all directors in case of companies; NSE may from time to time modify / expand the scope of activities that could be considered as relevant experience for the above purpose.

Disclaimer - The Exchange reserves the right to accept or reject any application or amend the terms & conditions without assigning any reasons whatsoever. The number of members to be admitted shall be at the sole discretion of the Exchange.

Updated on: 06/01/2020
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