Trading members desirous of applying for multiple membership of the Exchange are requested to refer to Circular no. 484 , Download Reference No: NSE/MEM/6372 dated July 13, 2005 issued in this regard.
Multiple Membership of the Exchange will be permitted with the following conditions:
- The 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.
- For 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.
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.
- Board 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..
- Undertaking 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 the Exchange.
- In case of default or failure of subsidiary company to meet the dues/obligations towards NSE/NSE Clearing and/or investor grievances & arbitration awards, the holding company shall also be 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 time.
- Similarly, in case of default or failure of holding company to meet the dues/obligations towards NSE/NSE Clearing 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 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.