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1. INTRODUCTION

Securities and Exchange Board of India (Stock Brokers and Sub Brokers) Regulations, 1992 provides for mechanismfor inspection of member-brokers with a view to ascertain whether the member-brokers registered are carrying on thebusiness in terms of the provisions of the Regulations and also whether the conduct of the member-brokers is in theoverall interest of the capital market and investors. Stock exchanges, being Self Regulatory Organizations (SRO) wouldbe primarily responsible for ensuring orderly conduct by its member-brokers and also ensuring that the relevant Rules,Bye-laws, Regulations and directions are being complied with by its member-brokers.

As per Securities and Exchange Board of India (SEBI) Circular No. SEBI/SMD/DBA-1/CIR-27/2003/25.06.2003 datedJune 25, 2003; every stock exchange is required to inspect the books of accounts and other documents of at least20% of its active member-brokers every year including the subsidiaries formed by the Regional Stock Exchange, whohave become members of the stock exchanges, are to be inspected every year.

The purpose of the inspection is to ensure that:

• Proper books of accounts, records and documents have been maintained by a member-broker in the mannerspecified in Rule 15 of the Securities Contracts (Regulation) Rules, 1957 and Regulation 17 (1) of the Securitiesand Exchange Board of India (Stock Brokers and Sub-Brokers) Regulation, 1992.

• The member-broker has complied with the Rules, Byelaws and Regulations of the Exchange.

• The member-broker has complied with the provisions of the Securities Contracts (Regulation) Act, 1956, theSecurities Contracts (Regulation) Rules, 1957, the SEBI Act, 1992 and the Rules and Regulations made thereunderand SEBI (Stock-Brokers and Sub-Brokers) Rules, 1992.

• The member-broker has complied with various notices, circulars, press releases, etc issued by the Ministry ofFinance, SEBI and the Stock Exchange.

• The conduct of the member-broker is in the overall interest of the capital market and the member-broker is fair indealing with his clients.

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The Exchange has set up a separate cell called Inspection cell in the Department of Surveillance & Supervision (DOSS),which has been entrusted with the responsibility to carry out inspection of the books of accounts, records and otherdocuments maintained by its member-brokers including their branches.

The Exchange issues letters to the member-brokers selected on the basis of defined criteria informing about thescheduled date of inspection and advising them to send the Inspection Questionnaire in soft as well as hard copyform (containing basic information about background and operations of the member) properly filled up alongwith allthe required data and documents before the commencement of inspection.

The Inspecting Team inspects the books and records on a sample basis and prepares inspection report on theirregularities observed during the course of inspection. Observations/findings of the inspection report are forwarded tothe member-brokers concerned. The member-broker is required to submit his reply on the observations contained inthe Inspection Report, within the stipulated time.

The reply given by the member-broker is then vetted and action against the member-broker for the non-compliancesobserved during the inspection, is initiated as per the norms laid down in this regard by the Disciplinary Action Committeeconstituted by the Exchange.

The final action initiated is communicated to the member-broker and the member-broker is also advised to takenecessary steps to ensure that such non-compliances do not recur in future.

Further, to ensure compliance by the member-brokers with the recommendations made by the Exchange, the member-brokers are required to submit a compliance certificate either from their Compliance Officer or from a CharteredAccountant, within 30 days from the receipt of the final action letter from the Exchange confirming that all therecommendations made by the Exchange have been implemented by them.

2. INSPECTION MECHANISM

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The member-brokers of the Exchange are required to maintain the following books of accounts and records as perRule 15 of the Securities Contracts (Regulation) Rules, 1957 and Regulation 17 of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. These books and records are to be preserved for a minimum period of five years as perthe requirements of Regulation 18 of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992.

It may however, be noted that SEBI has decided that in cases where, copies of documents have been taken by CBI,Police or any other enforcement agency during the course of any investigation, it is necessary to preserve the originaldocuments, both in electronic and physical form till the trial is completed. Members may refer to Exchange Notice No.20050805-20 dated August 5, 2005 & Exchange Notice No. 2005127 – 18 dated December 27, 2005 in this regard.

For the purpose of Inspection, the member-brokers shall keep the following records/documents, (including those ofbranches) ready before the commencement of inspection.

a. Register of transactions (Sauda Book);

b. Clients ledger;

c. General ledger;

d. Journal;

e. Cash book;

f. Bank book;

g. Register containing particulars of securities received and delivered.

h. Counterfoils or duplicates of contract notes issued to clients;

i. Written consent of clients in respect of contracts entered into as principals;

j. Margin deposit book;

k. Register of accounts of sub-brokers;

l. KYC/Member-Client Agreement/Tripartite Agreement between broker, sub-broker and clients.

In addition to the above statutory requirements, member-brokers of the Exchange are inter-alia, required to maintainthe following records/documents:

3. MAINTENANCE OF BOOKS OF ACCOUNTS, RECORDSAND DOCUMENTS

Sr. No. Document Required Hard / Soft RemarksCopy

1.CERTIFICATES & APPROVALS

1. Members, Sub-broker’s and Remisier’s Registration HardCertificate (ORIGINAL)

2. Exchange approval for Own Trading from Multiple locations Hard

3. Approval letter from Exchange for advertisement Hard

4. Approval letter from Exchange for change in Shareholding HardPattern and change in designated directors.

5. Digital Signature Certificate for ECN Hard

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Sr. No. Document Required Hard / Soft RemarksCopy

DOWNLOADABLES & SYSTEM REQUIREMENTS

6. Order Book (Order Log) Soft OR Hard

7. Margin Deposit Book (DM, DS, DP file) Soft OR Hard

8. Daily Margin Statement Soft OR Hard

9. Money Statement Soft OR Hard

10. Copy of IML undertaking Hard

11. E-Mail ID for Investor Grievance -

12. Mapping in back-office -

13. RCBDL FILE Soft

14. ACBDL FILE (For Auction trades) Soft

15. Valan Balance Sheet Soft

2. AUTHORITY & UNDERTAKINGS

16. Acknowledged copy of Board Resolution / Power of Attorney Hardfor Signing Contract Notes

17. Acknowledged letter of appointment of Compliance Officer Hard

18. Appointment of Principle Officer under PMLA and documented HardPMLA Procedures

19. Documented Risk Management System Hard

20. Documented Internal Control System Hard

21. List of subbrokers & remisiers pending registration Hard

22. List of Employees Hard

23. Brief Note on Funding Arrangement & Insider trading Hard

3. DOCUMENTS & REGISTERS

24. Pool A/c and Beneficiary A/c Statements Soft AND Hard(Transaction as well as Holding Statements)

25. Client wise segregation of securities Soft(If securities are lying in Beneficiary A/c)

26. Utilisation of Funds Statement Hard

27. Security Register / Ledger Hard

28. Copy of statement of accounts for Funds & Proof of HardSending to the clients

29. Copy of statement of accounts for Securities & Proof of HardSending to the clients

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30. Copy of STT Statement & Proof of sending to the clients Hard

31. Copy of Contract Notes (1st contract note of the Financial Year) Hard

32. Lease Agreement/Rent Receipt for Branch Offices Hard

33. Proof of Designation of Client Bank A/c Hard

34. Investor Grievance Register Soft/Hard

35. Proof of Authorized user for operating BOLT

36. Organization Chart Hard

37. Blank copy of KYC Hard

38. Blank copy of contract note Hard

4. BOOKS OF ACCOUNTS & VOUCHERS

39. Trial Balance, Profit & Loss A/c and Balance Sheet Soft

40. General Ledger (Including Dividend ledger & Brokerage ledger) Soft

41. Client Ledger Soft

42. Bank Book & Cash Book Soft

43. Bank Reconciliation Statements Soft OR Hard

44. Bank Statements Hard

45. Contract Notes along with acknowledgement proof Hard

46. KYC/Member Client Agreements Hard

47. Authority for maintenance of Running Account of clients Hard

48. Disclosure of Own Trading to Clients Hard

49. Sauda Book Soft

50. Bill Summary & Scrip-wise client Summary Soft

51. Demat Instruction Slips & Vouchers Hard

52. Proof of Statutory Payments (SEBI Fees) Hard

53. Sub Broker’s Inspection Report Hard

54. ECN Log Report Soft

Sr. No. Document Required Hard / Soft RemarksCopy

Members are required to maintain separate set of books for each exchange in which they operate. Further, for a particularExchange a separate set of books is required to be maintained for each particular segment of the Exchange in whichthe member is operating.

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From the above list of books and documents, few terms are explained herein below.

a) Order Book

SEBI vide Circular no. SMD/POLICY/IECG/1-97 dated February 11, 1997 has provided that the member-brokersshould maintain record of time when a client has placed the order. This information is required to be maintainedby the member-broker in his Order Book. Order book should generally contain the following information:

• Identity of the person placing the order

• Date and time of order received

• Name of the person receiving the order

• Name of the client, description and value of the securities to be bought or sold

• Terms and conditions of the order stating price/rate limit or price/trade related instructions and time limit (if any)

• Details of any modification or cancellation, if any

• Reference number of the contract note issued

• Serially numbered orders

However, the Exchange may consider accepting Order Log (Ord file) in cases where member-brokers have notmaintained Order Book as prescribed by SEBI.

b) Broker Query File (BRK file)

This statement is downloaded by the member-broker from the Exchange on a daily basis. This statement showsthe details of all the transactions executed by a member-broker across all his terminals for a particular trading day.It shows Trade ID, Transaction ID, Time of execution of a transaction, scrip quantity, scrip code, type of transaction(such as own, client etc), Client ID and the terminal from which the transaction was executed alongwith date.

c) Register of Transactions (Sauda Book)

All member-brokers are required to maintain a ‘Sauda Book’, which contains details of all trades transacted bythem on a day-to-day basis. This is a basic record, which each member-broker is required to maintain regularlyon day-to-day basis. It contains the details regarding the name of the scrip, name of the client on whose behalf thedeals have been done, rate and quantity of scrip bought or sold. These details are maintained date-wise. Thisregister contains all the transactions, which may be of any of the kind mentioned below:

• Member-broker’s own business on the Exchange.

• Member-broker’s business on the Exchange on behalf of clients.

• Member-broker’s business with the clients on principal-to-principal basis.

• Member-broker’s business with the members of other Stock Exchanges.

• Member-broker’s business on behalf of his clients with the members of other Stock Exchanges.

• Spot transactions, etc.

d) Contract Notes / Contract note cum bill

The Contract note is a document through which a contractual obligation is established between a member-brokerand a client. This is the prime document on the basis of which all the disputes between the member-broker andhis clients are settled.

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Every member-broker is required to issue contract notes to all his clients for the securities sold and purchased byhim on their behalf within 24 hours of execution of trade and obtain acknowledgement of the clients alongwith thedate of receipt on the duplicates/counterfoils of the contract notes and preserve the same for future reference(Bye law 247A of the Rules, Bye laws and Regulation of the Exchange and Exchange Notice No.4914/96 datedAugust 13, 1996) The member-broker shall maintain a proper record for dispatch of contract notes to the clients ifthe same are dispatched through post, courier etc.

Rule 15 of the Securities Contracts (Regulations) Rules, 1957 provides that every member-broker of a recognizedStock Exchange shall maintain and preserve counterfoils or duplicate of the contract notes issued to the clients fora period of two years. (Rule 15 of SCR Rules and exchange Notice No. 20050805-20 dated August 5, 2005).

When a member-broker is acting as an agent for his client, he is required to issue contract note in Form A orcontract note cum bill in Form AA. Member-brokers are permitted to issue Contract note cum bill in Form AA toinclude the particulars normally provided in the bills, in the contract notes issued by them to their clients, so thatthey need not issue separate bills to their clients. Members brokers are advised to ensure that the contract notesare issued strictly in accordance with the format prescribed either in Form ‘A’ of Regulation 14.2 of the Rules, Bye-Laws and Regulations of the Exchange or as per Form ‘AA’ as prescribed in the Exchange Notice No. 20060627-18 dated June 27, 2006 and Notice no. 20060630-02 June 30, 2006).

When a member-broker is dealing with constituents as Principals, the contract note is required to be issued inForm B or Contract note cum Bill is required to be issued in Form BB.

Formats of Form AA and Form BB are merely recommendatory in nature and member-brokers are at liberty toinclude any other additional matter or information therein as they may desire, without diluting/altering the basicForm A and Form B of the contract note stipulated in Appendix B to Regulation 14.2 of the Rules, Byelaws andRegulations of the Exchange.

The member-brokers are required to issue contract notes to clients, which are serially numbered. The serialnumber on the contract notes shall be on an annual basis and not on a daily basis. The contract notes issued tothe clients shall be numbered with unique running serial number commencing from one which shall be reset onlyat the beginning of every financial year. Financial year for the purpose of resetting the serial number of contractnote is April to March.

The Contract Notes are required to be signed either by the member-broker himself or his constituted attorney.Further, a copy of Board resolution / Power of Attorney, authorizing the person to sign the contract notes, isrequired to be filed with the Exchnage (Bye-law 223 and Rule 213 of the Bue-Laws, Rules & Regulations of theExchange and Exchnage notice no. 1024/98 dated March 20, 1998). In case a sole proprietor/partnership firmwishes to authorise another person to sign the Contract Notes, then the member-broker is required to execute apower of attorney on a stamp paper of Rs. 100/- authorising another person (s) to sign the contract notes. In caseof corporate member, a board resolution is required to be passed to authorise a person (s) including Directors tosign the contract notes. The power of attorney / board resolution(s) together with specimen signatures of authorisedsignatories are required to be filed with the Membership Department of the Exchange.

The member-brokers are required to quote their Permanent Account Number (PAN) as well as PAN of their clientson the contract note issued to clients, if the value of the contract exceeds Rs. 1 lakh or more pursuant to Rule114B of the Income Tax Rules, 1962. (Exchange Notice no. 20020930-4 dated September 30, 2002)

The member-brokers are also required to quote the unique client code allotted to the client on the contract note.

Electronic Contract Note (ECN)

As per SEBI Circular No. MRD/DoP/SE/Cir-20/2005 dated September 8, 2005, digitally signed ECNs are to besent only to those clients who have opted to receive the contract notes in an electronic form, either in the MemberClient agreement / Tripartite agreement or by way of a separate letter.

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All ECNs sent through e-mail are to be digitally signed, encrypted, non-tamperable and complying with the provisionsof the IT Act, 2000.

Whenever an Electronic Contract Note is sent, acknowledgement of e-mail, proof of delivery i.e., log report generatedby the system at the time of sending the contract notes is to be maintained by the member broker for the specifiedperiod, in a soft and non-tamperable form. Further, a log report to provide the details of contract notes that are notdelivered to the client / rejected or bounced e-mails.

Proper communication is to be made in the agreement executed with the client for issuing Electronic ContractNotes that non-receipt of bounced mail notification shall amount to delivery of the contract note at the e-mail ID ofthe client.

Physical contract note to be sent to the clients, wherever an Electronic Contract Note has not been delivered tothe client or has bounced back from the e-mail ID of the client. Further, proof of delivery of such physical contractnotes is to be maintained by the member.

In addition to the e-mail communication of the ECN to the client, it has to be simultaneously published on the web-site of the member in a secured way and enable easy access to the clients.

The member-brokers can issue contract notes authenticated by means of digital signatures (Electronic ContractNotes – ECN‘s) provided that the member-broker has obtained digital signature certificate from certifying authorityunder the Information Technology Act, 2000. Members may kindly refer to SEBI Circular Nos. SEBI/SMD/SE/15/2003/29/04 DTAED April 29, 2003 & SMDRP/Policy/Cir – 56/2000 dated December 15, 2000 & Exchange NoticeNo. 20050909-13 dated September 9, 2005 stipulating conditions for issue of Electronic Contract Notes by members.

Issue of Contract notes in case of multiple trades for a single order.

In case of multiple trades resulting from single order, at the request of the clients, the member-brokers may issuecontract notes with weighted average price (WAP), as per the following formula:

Total Value of the Shares traded for an order

Total Number of Shares traded for an order

The member-broker shall ensure that details of trades such as Order No., Trade No., Trade Time, etc is attachedto the contract note as an Annexure when a consolidated trade is shown in the contract note. The member-brokershall mention the words “as per annexure” in the place provided for trade no. and trade time in the format of thecontract note prescribed by the Exchange. (Exchange notice no. 4646/97 dated November 29, 1997).The Exchange has prescribed new format of contract note. Trading Members are advised to ensure that therevised format of contract note is strictly implemented latest by October 23, 2006.

A statement indicating Securities Transaction Tax (STT) charged on the transaction should be separately given tothe clients as an annexure to the contract note or it can be sent to the clients on an annual basis. (ExchangeNotice No.20040927–13 dated September 27, 2004 and No.20060929-22 dated September 29, 2006).

e) Margin Deposit Book

The member-brokers are required to maintain a margin deposit book wherein details of all the margins depositedwith the Exchange are to be recorded. Regulation 17 (1) of SEBI (Stock-brokers and Sub-brokers) Regulations,1992. The Exchange may consider accepting DM/DS downloadable files available with the members in caseswhere member-brokers have not maintained separate Margin Deposit Book.

f) Investor Grievance Register and designated e-mail ID

Members are required to maintain Investor Grievance Register for writing investor’s grievances (Notice

WAP =

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No.20040306-9 dated March 6, 2004 and Notice No.20070906-10 dated September 06, 2007).

SEBI vide its circular No.MRD/DoP/Dep/SE/Cir-22/06 dated December 18, 2006 advised all the member-brokersto designate e-mail IDs of their respective grievance redressal division and / or of their compliance officers exclusivelyfor the purpose of registering complaints by investors and display such e-mail IDs and other relevant detailsprominently on their websites and in the various materials / pamphlets / advertisement campaigns initiated bythem for creating investor awareness. (Exchange Notice No.20070131-11 dated January 31, 2007).

g) Clients Ledger

Every member-broker is required to maintain clients’ ledger in respect of all the clients registered with him. Thisledger contains the details of the bills raised by the member-broker on the clients and the payment received fromor made to them. Inspection of this ledger can bring out the cases of delay by a member-broker in making paymentto the clients. Receipt/payment from the ledger account may also indicate whether the member-broker is involvedin fund-based activities, which is in violation of the guidelines contained in the circular issued by SEBI.

h) Securities Ledger

A member-broker is also required to maintain a Register or Ledger Account of securities, client wise and securitywise, giving, inter alia, the following details:

• Date of receipt of the security.

• Quantity received.

• Party from whom received.

• Purpose of receipt.

• Date of delivery of the security.

• Quantity Delivered.

• Party to whom delivered.

• Purpose of Delivery, and

• A Separate register or ledger in respect of its own securities.

Thus, member is required to maintain a register or ledger account of securities, client-wise and security-wise,giving, inter alia the details of receipt/delivery of securities and a separate register or ledger in respect of ownsecurities as per Bye-Law 247A(2) and Reg. 17(1) of the SEBI (Stock Brokers & Sub Brokers) Rules, 1992.

The Exchange may consider accepting ‘holding statement’ of securities as on a particular date acknowledged bythe clients.

i) Dematerialised Securities

All member-brokers are required to open two separate demat accounts with their Depository Participants (DPs)for handling the receipt and delivery of own shares and client shares.

One such account is ‘Own Beneficiary Account’ wherein the demat securities belonging to the member-broker forhis own account are held and the other is ‘Pool Account’ wherein the demat securities of the clients are temporarilylodged for transfer to/from the Clients/Clearing House in the Pay-in/Pay-out. In case of sale of securities byclients, the clients transfer the securities to the member-broker’s Pool Account before the pay-in and the member-broker transfers the same from the Pool Account to the Clearing House on the Pay-in day. In case of purchase ofsecurities by the clients, the Clearing House transfers the securities to the Pool Accounts of the member-brokersand the member-brokers then transfers the same to the Demat Account of the individual client. The member-

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brokers are required to maintain a proper record of all shares received and delivered from their Pool Account aswell as preserve acknowledged copies of the delivery instructions given to their DP for transferring the securitiesfrom the Pool Account to the Client’s account after the Pay-Out.

In case of clients’ shares lying with the member, they have to be kept in a separate Beneficiary Account and themember is required to maintain client wise segregation of clients’ securities lying with the member. (Bye-law 247Aand Exchange Notice No. 4850/97 dated December 10, 1997).

Nevertheless, securities of clients are to be received and delivered from/to the respective beneficiary account ofthe client only. (Exchange Notice No. 20030903-5 dated September 3, 2003).

j) Bank Book and Cash Book.

The member-brokers are required to maintain separate bank accounts for own funds and clients’ funds (Bye-law247A of the Rules, Bye-laws and Regulations of the Exchange). Funds received from the clients and paymentsmade to the clients should be reflected in the Client Bank Account. Client Account should be designated as ClientBank Account and the word “Client” should appear in the title of the account. (Bye-law 247A (1) and ExchangeNotice No. 4850/97 dated December 10, 1997).

All fund transactions relating to member’s own trading and relating to own/office expenses should be routedthrough Own Bank Account. Transactions other than those of clients should not be routed through Client BankAcount. Further, no overdraft facility should be availed on the Client Bank Account (Bye-law 247A (1) and ExchangeNotice No. 4850/97 dated December 10, 1997).

Members should not accept any cash from clients, whether against obligation or as margin for purchase of securities,except in case of exceptional circumstances and to the extent not in violation with the Income Tax requirement asmay be in force from time to time. (Exchange Notice No. 20030903-5 dated September 3, 2003 and ExchangeNotice No. 20050324-21 dated March 24, 2005).

Members are to refrain from fund lending and borrowing activities, except those in connection with or incidental tothe securities business. [Rule 8(1)(f) and 8(3)(f) of Securities Contract (Regulations) Rules, 1957and SEBI circularno.SMD/POLICY/CIR-6/97 dated May 7,1997].

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l REGULATION OF CLIENT-BROKER TRANSACTIONS

All transactions relating to clients are to be routed through the client bank account. A member-broker may open asingle client bank account or multiple client bank accounts. Whenever a member-broker trades as a principal, he cannotuse the client’s account for payment.

No money shall be withdrawn from clients account other than money in respect of which there is a liability of clients tothe member-broker, provided that the money so drawn should not exceed the total of the money so held for the timebeing for each such client.

Member-brokers should not use clients’ account for making payment for, Office Expenses such as, salary, TelephoneBills, TDS payments, Purchase of Office Equipment, etc.

It is compulsory for all member- brokers to keep separate accounts for clients’ securities and to keep such books ofaccounts, as may be necessary, to distinguish his securities from those of the clients’ securities. Such accounts forclients’ securities shall, inter-alia, provide for the following:

a. Securities received for sale or kept pending delivery in the market;

b. Securities fully paid for, pending delivery to clients;

c. Securities received for transfer or sent for transfer by the member- broker, in the name of client or his nominee(s);

d. Securities that are fully paid for and are held in custody by the member-broker as security/margin etc. The member-broker shall obtain proper authorisation from the client for the same.

e. Fully paid for clients’ securities registered in the name of the member-broker, if any, towards margin requirementsetc.;

Member-broker should ensure payment of money/delivery of securities to the clients within 24 hours of the declarationof payout by the Exchange in respect of the concerned settlement.

At times payment may be delayed on specific instructions of the client. In such cases, member-broker should obtainwritten confirmation from the clients. The member-brokers may be allowed to maintain running account of the clients,if in respect of such accounts, the member-broker is having general authority from clients to maintain running accountwithout any obligation to receive payment/ delivery of securities strictly within 24 hours of declaration of pay-out by theExchange in respect of the concerned settlement.

The Interest, dividend or any Bonus / Right shares received on the securities of the clients should be passed on to theclients immediately.

Pursuant to provisions contained in SEBI circular no. SEBI/MRD/SE/Cir-33/2003/27/08 dated August 27, 2003 it is tobe noted that member-brokers should not accept cash from the client whether against obligations or as margin forpurchase of securities and / or give cash to the clients against sale of securities.

All payments should be strictly received / made by the member-brokers from / to the clients strictly by account payeecrossed cheque / demand drafts or by way of direct credit into the bank accounts of the clients concerned throughEFT, or any other mode allowed by RBI.

The member-brokers should accept cheques drawn only by the clients and also issue cheques in favour of the clientsonly, for their transactions. However, in exceptional circumstances the member-broker may receive the amount in cash,to the extent permitted by the Income Tax department / authorities from time to time.

4. DEALINGS WITH CLIENTS

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Similarly, receipt/delivery of securities in “demat mode” should also be directly to / from the “beneficiary account” ofthe respective client except delivery of securities to a recognised entity such as approved intermediaries under theapproved scheme of the stock exchange and / or SEBI.

l REGISTRATION OF CLIENTS.

SEBI, in order to bring uniformity in documentary requirements across different segments and Exchanges and to avoidduplication and multiplicity of documents, has formulated uniform set of documents to be entered into and maintainedby the member-brokers with their clients and sub-brokers. SEBI vide its circular no.SEBI/MIRSD/DPS-1/Cir-31/2004dated August 26, 2004 directed that the requirements of SEBI (Stock Brokers and Sub brokers) (Amendment)Regulations, 2003 relating to change in role of sub brokers and their main brokers, including format of the Model TripartiteAgreement between broker, sub-broker and clients shall come into effect from December 01, 2004. This was extendedby SEBI upto April 01, 2005 vide its circular no.SEBI/MRD/DOPS/Cir-44/2004 dated December 29, 2004 (ExchangeNotice no.20040827-11 dated August 27, 2004) which are as follows :

(a) Client Registration Form (KYC) (Uniform across all Segments & all Exchanges)

(b) Member-Client Agreement (Uniform across all Segments but different agreements for different Exchanges)

(c) Model Tripartite Agreement (Applicable only in Cash Segment and different agreements for different Exchanges)

(d) Risk Disclosure Document (Uniform across all Segments & all Exchanges) and

(e) Broker - Sub broker Agreement

l KNOW YOUR CLIENT FORMS (KYC)

SEBI has asked all the member-brokers of the Stock Exchanges to maintain a database of their clients. This conceptis known as “KNOW YOUR CLIENT”. SEBI has devised model formats for the Client Registration Form, Broker ClientAgreement and Tripartite Agreement between Broker-Sub broker and Clients. Different format has been prescribed forindividuals and non-individuals. The stock exchanges/member broker may incorporate any additional clauses in thesedocuments provided these are not in conflict with any of the clauses in the model document, as also the Rules,Regulations, Articles, Byelaws, circulars, directives and guidelines.

SEBI has put onus on the member-brokers to complete all the details pertaining to the clients in Know Your Clientform.

It is reiterated that it shall be the responsibility of the member-broker to satisfactorily identify his clients. For the purpose,the member-broker may also seek additional information, if any, so as to satisfy himself about the antecedents of theclient. It would be broker’s responsibility to provide clients details as and when required.

Further, the requirement of obtaining Client Registration Form may be waived for SEBI registered Foreign InstitutionalInvestor, Mutual Funds, Venture Capital Funds and Foreign Venture Capital Investors, Scheduled Commercial Banks,Multilateral and Bilateral Development Financial Institutions, State Industrial Development Corporations, InsuranceCompanies registered with the Insurance Regulatory Development Authority (IRDA) and Public Financial Institution asdefined under section 4A of the Companies Act, 1956. Further the member-broker and these clients may at theirdiscretion, decide about the requirement of entering into broker-client agreement and bringing the contents of RiskDisclosure Document to the notice of such clients.

The member-broker is required to disclose to his existing clients whether he does proprietary trading. Further, thebroker is also required to disclose this information upfront to his new clients at the time of entering into the “KnowYour Client” Agreement. In case a broker does not presently trade on proprietary account but chooses to do so at alater date, he is required to disclose this to his clients before carrying out any proprietary trading. (Exchange NoticeNo. 20031125-7 dated November 25, 2003).

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Member-brokers shall exercise due diligence with regard to trading by the clients vis-à-vis their income levels andother parameters / information given in the Client Registration Forms. Member-brokers may seek additional information,if any, so as to satisfy themselves about the antecedents of their clients.

Member-brokers are advised to exercise due and adequate caution and impress upon their local as well as upcountryclients as well as sub-brokers to know all their clients thoroughly before executing trades on their behalf. Member-brokers should also exercise offline surveillance over the transactions routed through their BOLT Terminals by theirclients / sub-brokers to detect the various kinds of abuses or misuse of the systems and take adequate steps to presenttheir recurrence. This is all the more necessary in view of the countrywide expansion of BOLT network and the increasedvolume of business along with risk involved.

Member-brokers are advised to evolve and put in place an appropriate mechanism to assess financial strength,performance tracking, trading pattern vis-à-vis their clients’ position and dealings in respect of all those clients in cashsegment who have value of receivables and deliverables (gross) taking into account two consecutive settlements ofRs. 25 lacs or more.

• Broker – Client Agreement

Member-broker shall enter into an agreement with all his clients before accepting orders on behalf of clients. Thisagreement has to be on a non-judicial stamp paper of adequate value duly signed by the parties on all pages, andthe clauses in the agreement should be as prescribed by SEBI.

This agreement contains clauses defining the rights and responsibility of client vis-à-vis broker. The member-broker can also add further clauses in the model agreement as per their requirement, provided these are not inconflict with any of the clauses in the model document, as also the Rules, Regulations, Articles, Byelaws, circulars,directives and guidelines.

• Tripartite Agreement between Broker-Sub-Broker and Clients

A sub-broker shall enter into a tripartite agreement with his client and with the main broker specifying the scope ofrights and obligations of the sub-broker, main broker and clients of sub broker.

• Risk Disclosure Document

Member-brokers of the Exchange are required to get the Combined Risk Disclosure Document (for Cash andDerivatives Segment) signed by all their clients (existing as well as new). (Exchange Notice No. 20040827-11dated August 27, 2004)

Risk Disclosure document is a document detailing the basic risks involved in trading on a stock exchange, therights and obligations of the clients, etc. The document makes the investors aware of the fact that things likeinvestment in equity shares, or other instruments traded on the stock exchange, is generally not an appropriateavenue for those with limited resources or limited trading experience and low risk tolerance. It asks the investor toconsider whether such trading is suitable for them in the light of their financial condition. Investors are also madeaware of the fact that there can be no guarantee of profits, or no exception from losses. Highlighting these points,the Exchange has devised a combined Risk Disclosure Document for both Cash and Derivatives Segment for thepurpose of operational convenience to the member-brokers.

SEBI vide circular number SEBI/MIRSD/DPS-I/Cir-31/2004 dated August 26, 2004 has prescribed uniform documentrequirement for trading namely, (a) Client Registration Form (b) Member Client Agreements (c) Tripartite agreementbetween broker-sub broker and clients wherever applicable and (d) Risk Disclosure documents. Paragraph 3 ofthe said circular states that the stock broker may incorporate any additional clauses in these documents providedthese are not in conflict with any of the clauses in the model document, as also the Rules, Regulations, Articles,Byelaws, Circulars, directives and guidelines. Moreover, the trading member may also seek additional informationso as to satisfy himself about the antecedents of the client.

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Trading members are required to ensure the following:

(1) At the time of registering a client, the client shall be informed in writing that only the documents stated above aremandatory and any additional clause or documentation shall be voluntary and at the discretion of member andclient.

(2) Additional documents shall state at the beginning in bold that the document is voluntary.

(3) However, if such documents are required in order to ensure smooth functioning of special facility such as internettrading offered by the trading member, the client shall be informed in writing clearly that such documents arevoluntary and the client need not execute such documents if he/she does not wish to use that facility.

(4) Such documents, if any shall also recognize specifically the right of the client to terminate the document. In suchan eventuality, the trading member may terminate the special facility.

(5) The docket or folder containing draft mandatory documents for signing and the checklist containing mandatorydocuments shall not include draft voluntary documentations, if any. Further, these mandatory documents shouldrelate to only opening the account for stock trading and not for any other additional business/activity like openingof Bank Account, DP Account etc.

(6) Ensure that Client Registration details as contained in the Client Registration Form / Know Your Client (KYC) form,including financial details are complete in all respects, correctly obtained and are reviewed and updated periodically.Further, ensure to monitor the trading activities of the clients based on his financial details as contained in theclient’s KYC. (Exchange Notice No. 20061120-9 dated November 20, 2006).

(7) No documentation shall give any exclusive right or control to the trading member or third party over the demataccount or ledger account or bank account of the client except to the extent of and restricted to the client (includingfamily members who have given authorization) obligation to the trading member in respect of the transactionsdone or to be done (like upfront margin) by the trading member on behalf of the client on the Exchange. (ExchangeNotice No.20060704-6 dated July 04, 2006).

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Members should not accept any cash from clients, whether against obligation or as margin for purchase of securities,except in case of exceptional circumstances and to the extent not in violation of the Income Tax requirement as maybe in force from time to time. In view of the above, when such “exceptional circumstances” arise the members aredirected to inform the Department of Surveillance & Supervision of the Exchange within 15 days to seek an approvalin this regard on a case-to-case basis (Exchange Notice No. 20030903-5 dated September 3, 2003 and Notice No.20050324-21 dated March 24, 2005).

All payments should be strictly received / made by the member-brokers from / to the clients strictly by account payeecrossed cheques / demand drafts or by way of direct credit into the bank accounts of the clients concerned throughEFT, or any other mode allowed by RBI.

The member-brokers should accept cheques drawn only by the clients and also issue cheques in favour of the clientsonly, for their transactions. Similarly in case of securities, giving taking delivery of securities in “demat mode” shouldalso be directly to/from the “beneficiary accounts” of the respective clients except delivery of securities to a recognisedentity such as approved intermediaries under the approved scheme of the stock exchange and/or SEBI. (SEBI Circularno. SEBI/MRD/SE/Cir-33/2003/27 /8 dated August 27, 2003). ((Exchange Notice No. 20030903-5 dated September 3,2003).

The delivery of funds & securities has to be made to the clients within 24 hours of declaration of pay-out unless theclient has requested otherwise. (Bye-Law 247A(2) and Exchange Notice No. 20020917-2 dated September 17, 2002)

5. MODE OF PAYMENT & DELIVERY

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Member-brokers are mandatory required to appoint a Compliance Officer as per Regulation 18A of the SEBI (StockBrokers and Sub-brokers) Regulations, 1992. The concerned Compliance Officer shall be responsible for monitoringthe compliance by the concerned member-broker in respect of the SEBI Act, 1992, Rules, Regulations, notifications,guidelines, instructions, etc issued by SEBI / Central Government. Monitoring redressal of the grievances of the investorsis also the responsibility of the Compliance Officer. Member are required to keep the Exchange informed of theappointment of compliance officer (Exchange notice no. 20021001-5 dated October 01, 2002).

Compliance Officer shall immediately and independently report to SEBI any non-compliance observed by him.

6. COMPLIANCE OFFICER

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Securities and Exchange Board of India (SEBI) vide its circular no. SMDRP/Policy/CIR-39/2001 dated July 18, 2001made it mandatory for all member-brokers to use Unique Client Codes (UCC) for all clients.

For this purpose, member-brokers shall allot a Client Code to each of his clients including the clients of his sub-brokers,which is Unique. The same code shall not be allotted to any other client in his office or at their branches or to theclients of sub-brokers and not more than one code should be allotted to any of clients. (Exchange Notice No.93424/2001 dated July 23, 2001, No. 20040128-3 dated January 28, 2004, No.20060927-21 dated September 27, 2006 andNo.20060928-17 dated September 28, 2006). The Client Code allotted to the clients including the clients of sub-brokersare required to be registered with the Exchange.

The member-brokers are also required to upload the PAN details of their client to the Exchange as part of the UCCdatabase and not to execute the trade for the client unless the PAN details of respective clients have been collected,verified with the Income Tax website and uploaded to the Exchange.(Exchange Notice no.20061229-26 dated December29, 2006 & 20070220-26 dated February 20, 2007 )

Member shall map the details of Unique Client Code of all their clients with their respective PAN/ Driving License etc.in their back-office. (Exchange notice no. 20030115-5 dated January 15, 2003). Member-brokers are required to maintainand preserve for a period of seven years a mapping of client codes used at the time of order entry in the trading.Further, the Stock Exchange is required to maintain a database of client details submitted by member-brokers. TheExchange shall maintain historical records of all submissions for a period of seven years.

The Exchange uploads to the members on a daily basis a cumulative file NPddmmyy.xxxx through the All Data Optionof Dload32, containing the client codes where trades have been executed either without registering the Client code orwithout uploading the PAN details of the client to the Exchange database. The codes attract a Penalty of Rs.100/- percode per day till the time these codes are registered / PAN details of these clients are uploaded in the ExchangeDatabase. (Exchange Notice no. 20070104-12 dated January 04, 2007).

For habitual offenders, who violate the requirement of timely updation of UCC along with PAN details of their clients,higher penalties are prescribed vide Exchange Notice No. 20080307-7 dated March 07, 2008.

A special facility is provided to the members for modification of client codes of executed trades. This modification canonly be done in the post closing session between 3.40 pm to 4.00 pm. A control has been provided in the AdminTerminal of the member-brokers facilitating the main member-broker to control the user who can be permitted to performthis activity.

Member-brokers were advised vide notice no 20030329 – 1 dated March 29, 2003 to ensure that the correct clientcodes are entered while placing the orders and the facility of modification of the client codes should be used sparinglyto rectify bonafide mistakes for genuine errors and to the minimum extent possible. Member-brokers are also advisednot to indulge in modification of client codes through their back office software and not to transfer trades from oneclient to another client or from own account to client’s account or vice-versa. Rectification, if any should be strictlycarried out during the post closing session only. (Exchange Notice No.20060221-11 dated February 21, 2006).

Members are required to ensure that the Client type is entered correctly at the time of placing the orders on the BOLTsystem and in case non-institutional trades are erroneously entered as Institutional trades, the same should be rectifiedduring the post closing session. Further, where the client type is not rectified, the same has to be immediately reportedto the Exchange for collection of the required margin. (Exchange Notice no. 20050919-25 dated September 19, 2005).

7. UNIQUE CLIENT CODE

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As per SEBI circular no MRD/DoP/SE/Cir-18/2006 dated September 26, 2006 PAN no. has been made mandatoryw.e.f. January 01, 2007 for dealing in the cash segment. Accordingly, trading members are required to collect copiesof PAN cards from their existing as well as new clients and maintain the same in the record after verifying with theoriginal.

Trading members can execute transactions in the cash segment on behalf of any entity/person only if the PAN detailsof such entity/person has been collected, cross-checked with the details on the website of the Income Tax Department,and uploaded by them to the Exchange as part of the Unique Client Code (UCC) details of the respective entity/person.

Trading members will to ensure that:

1. All new UCC registrations are mandatorily accompanied with the PAN details of the client.

2. Name and PAN details of the clients already uploaded by them in the UCC database of the Exchange is correctand verified with the details on the website of the Income Tax Department.

Trading members are also requested to ensure that Name and PAN of the client as appearing on the PAN Card iscorrectly uploaded by them to the Exchange. Trading members are also required to maintain a photocopy of the PANcard of the client in their records. (Exchange Notice No.20060908-13 dated September 08, 2006)

SEBI vide circular no MRD/DoP/SE/Cir-05/2007 dated April 27, 2007 has decided that Permanent Account Number(PAN) would be the sole identification number for all participants transacting in the securities market, rrespective ofthe amount of transaction.

Members are also advised to print PAN of the constituents on the contract notes, whenever the value of the contractexceeds Rs.1 lakh (Exchange Notice no. 20020930-4 dated September 30, 2002)

8. PERMANENT ACCOUNT NUMBER (PAN)

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The Exchange installs trading terminals at the member-brokers or their sub-brokers offices on their request. As perSEBI Circular No. SMDRP/Policy/CIR-49/2001 dated October 22, 2001, the member-brokers should install tradingterminals only at their registered offices, branch offices and their registered sub-brokers’ offices. Staff operating theBOLT TWSs must be on the member-brokers’ payroll. Remisier is authorized to operate BOLT at member-brokers’office only. (Exchange Notice No.104616/2001 dated November 12, 2001 & Notice No. 20040205-13 dated February05, 2004).

An office is considered as member-brokers’ office only if it is rented/owned/licensed by a member-broker of theExchange. In fact, member-brokers should have effective control over the functioning of those offices. A member-broker cannot locate his trading terminal at any other location. It is clarified that the trading terminals cannot be installedat Remisier’s office or client’s place.

TWS / IML Registration on BOLT

The Exchange had been permitting addition of new trading terminals and also installation of IML terminals for businessexpansion of members and the members availing of IML are required to execute Affidavit-cum-Undertaking regardinguse of the IML software.

Members are required to upload the information for all their TWS / IML along with the details of the approved usersthrough BOLT TWS no. 1 which allows for addition / updating / deactivation / activation of TWS / IML information onthe BOLT. The approved users i.e. employees of the member, remisiers operating from the member’s office and sub-brokers of the member can only be approved user for operating the trading / IML terminals.

Trading terminals / IML terminals allotted and particulars of which are not uploaded/wrong uploaded as above shall betreated as unauthorized terminals and renders the concerned members liable for disciplinary action as may deem fitincluding withdrawal of IML/additional terminals. (Exchange Notice nos. 20050118-3, 20050808-26, 20050819-9 &20050819-19 issued on January 18, 2005, August 8, 2005, August 16, 2005 & August 19, 2005 respectively).

In order to ensure compliance with registration of the IML/BOLT terminal location details to the Exchange through theCR module of the BOLT No.1, penalty norms are prescribed. Penalty of Rs 100/- per day per terminal will be levied tillthe time the location ID details are registered with the Exchange. (Exchange Notice No. 20070517-22 dated May 17,2007).

The Exchange will upload a file name LOC_DTL.xxxx (clg. no.) from April 24, 2006 onwards to all trading memberscontaining information regarding locations which are not registered or are incorrectly registered and orders are beingpunched from that location. This file would contain one record consisting of the fields in respect of the unregisteredlocation such as, Member ID, Order ID, Scrip Code, Quantity, Buy/Sell, Location ID, Date & Time.

For each office of the trading member and their sub-brokers where BOLT / IML terminal is located, it would be mandatoryfor the trading members to have atleast one user who has passed BSE’s Certification on Securities Market (BCSM).Further, for every block of additional five users, the trading member needs to have one BCSM certified user. The lastdate for compliance of the above requirement is April 30, 2008 (Exchange Notice No.20070522-25 dated May 22,2007 and No.20071024-28 dated October 24, 2007).

9. TRADING TERMINALS (BOLT / IML)

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It has been observed that certain member-brokers are putting large number of orders on pro-account from variouslocations rather than from one location as specified by them.

With a view to check such misuse of the above facility, the member-brokers are required to comply with the following:

a. Members are required to place their proprietory transactions under ‘own’ category.

b. Facility of placing orders on own account through trading terminals shall be extended only at one location of themember-brokers as specified / required by the member-brokers

c. Trading terminals located at places other than the above location shall have a facility to place orders only for andon behalf of clients by entering client code details as required / specified by the Exchange / SEBI.

d. In case any member-broker requires the facility of using own account through trading terminals from more thanone location, such member-broker shall be required to submit an undertaking to the stock exchange stating thereason for using the own account at multiple locations and the Exchange may, on case to case basis after duediligence, consider extending the facility of allowing use of own account from more than one location. (ExchangeNotice no. 20030909-1 dated Septembar 09,2003).

Further, member-broker is required to disclose to his existing clients whether he does proprietary trading. Further, thebroker is also required to disclose this information upfront to his new clients at the time of entering into the “KnowYour Client” Agreement. In case a broker does not presently trade on proprietary account but chooses to do so at alater date, he is required to disclose this to his clients before carrying out any proprietary trading. (Exchange NoticeNo. 20031125-7 dated November 25, 2003).

10. PRO-ACCOUNT TRADING

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Maximum rate of brokerage that can be charged by a member-broker is provided in the Bye-laws 205, Regulation14.1 & Notice No. 5116/93 dated November 11, 1993. As per this Regulation, the brokerage charged by a member-broker shall not exceed Rs. 0.25 per share or 2.5 % of the contract price, whichever is higher.

The maximum brokerage is exclusive of statutory levies but inclusive of the brokerage charged by a sub-broker. Incase member has transacted for the clients of sub broker, the aggregate amount of brokerage charged by tradingmember to sub broker and sub broker to his client shall not exceed the maximum scale of brokerage prescribed bythe Exchange & SEBI in this regard. (Exchange Notice No. 20051207-10 dated December 7, 2005).

The brokerage shall be charged separately from the clients and shall be indicated separately from the execution priceof transaction (s) in the contract note (s).

Member-broker shall levy brokerage on all the trades executed on behalf of its constituents except those, which are inthe nature of charity. (Bye-law 205 and 215 of the Rules, Byelaws and Regulations of the Exchange).

Bye Laws 218 (a) & (b) of the Rules, Bye Laws & Regulations of the Exchange has also been amended so that thesub brokers can also share brokerage with the member, in addition to the persons specified in the said Bye laws andsubject to such terms of brokerage as agreed upon in writing by way of agreement & as per the scale of brokerageprescribed by the Exchange or SEBI in this regard from time to time.

11. BROKERAGE

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A large number of disputes arise between the member-brokers / sub-brokers and their clients pertaining to paymentsdue to/from the clients. This may be due to non-submission of statement of accounts of funds / securities by the member-brokers to the clients on a regular basis.

In order to avoid such incidences, member-brokers are advised to adopt the following practices in terms of the ExchangeNotice Nos. 20020906-3 dated September 6, 2002, No. 20030114-9 dated January 14, 2003 and No.20080307-8 datedMarch 07, 2008 : -

1. Member-broker shall send to their clients, a complete ‘Statement of Accounts’ for both funds and securities inrespect of each of their clients at least once in every quarter within a month of the expiry of the said period.

2. The statement shall also include error reporting clause stating that the client shall report errors, if any, in thestatement within 30 days of receipt thereof to the member-broker.

3. In respect of institutional clients, the said requirement is applicable in case the member-brokers pay or receivefunds and receive or deliver securities from or to the institutional clients directly and not through custodians.

4. Member-broker should maintain an acknowledgement/confirmation record of dispatch of ‘Statement of Accounts’to the clients.

In the case of brokers providing Internet Trading facility and providing an access to an on-line accounting viewing andprint-out facility, it would be treated as sufficient compliance, if they send the ‘Statement of Accounts’ by email or wherea facility has been given to the clients to verify the above statements on the Internet trading terminal itself.

12. STATEMENT OF ACCOUNTS FOR FUNDS / SECURITIES

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The mandatory requirement of collection of 10% upfront margin from non-institutional clients has been done awaywith the implementation of Comprehensive Risk Management framework w.e.f May 30, 2005. However, SEBI hasdecided that, the Members should have a prudent system of risk management to protect themselves from client defaultand the quantum, form and mode of collection of margins from the clients is left to the discretion of the member brokerw.e.f. May 30, 2005.

As per SEBI Circular No.MRD/SE/CIR-12/2005 dated May 13, 2005 members are therefore required to have a prudentsystem of risk management which has to be well documented in writing and be made accessible to the clients and theExchange. (Exchange Notice No.20050513-26 dated May 13, 2005).

In order to provide a level playing field to all the investors in the Cash Market as in the case of Derivatives Market,SEBI has provided that all the Institutional Trades in the Cash Market would be subject to payment of margins asapplicable to transactions of other investors. To begin with, from April 21, 2008, all institutional trades in the cash marketwould be margined on a T+1 basis with margin being collected from the custodian upon confirmation of the trade.Subsequently, the collection of margins would move to an upfront basis. (SEBI Circular No. MRD/DoP/SE/Cir- 06 /2008 dated March 19, 2008).

13. COLLECTION OF MARGINS FROM CLIENTS

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Reports are being downloaded to member brokers on a daily basis, which give the client-wise details of VaR, ELMand Mark To Market margins levied by the Exchange.

As per the directions of SEBI, the member brokers are required to inform their clients about the margins levied ontheir traded positions on a day-to-day basis by way of either sending the margin information through email or alongwith the physical contract notes. The member brokers are also advised to include the following information in thestatements being provided to their Clients:

1. Total collateral deposits placed by the client upto day T-1 (with break-up in terms of cash, FDRs, BGs and securities).

2. Collateral deposits utilised towards margins upto the end of T-1

3. Collateral deposits placed by the client on day T (with break-up in terms of cash, FDRs, BGs and securities)

4. Margin adjustments for T day

5. Collateral status (balance with the member / due from the client) at the end of T day

The member brokers are required to comply with the said requirements with effect from February 18, 2008 (ExchangeNotice No.20080211-19 dated February 11, 2008).

14. CLIENT MARGIN INFORMATION(MARGIN REPORTING TO CLIENTS)

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Where a member-broker either buys or sells securities directly from / to his client without entering the client order onthe trading system of the Exchange, then he is said to be entering into transaction on principal-to-principal basis withhis client. Member-brokers are allowed to enter into principal–to-principal transactions with their clients, subject to certaincondition.

The following are the requirements regarding transactions on principal-to-principal basis:

1. Written consent of the client is to be obtained for executing a transaction on principal-to-principal basis, as requiredunder Section 15 of the Securities Contracts (Regulation) Act, 1956 and Bye-law 199 of the Rules, Byelaws andRegulations of the Exchange. Such consent from the client is to be obtained within a period of three days ofexecution of the transactions. Also separate consent is required to be obtained from a client for each transaction.One general letter consenting to all the transactions of this nature by a client will not do.

2. Contract notes issued by the member-brokers to the clients, when dealing with them as principals, are to beissued in accordance with Form B or BB as prescribed in Regulation 14 of the Rules, Bye-laws and Regulationsof the Exchange.

3. Such transactions can be entered only as spot delivery contracts and required to be reported to the Exchange onthe same day pursuant to SEBI circular no. SMD/RCG/CIR/(BKG)/293/95 dated March 14, 1995 and ExchangeNotice No.20040306-9 dated March 6, 2004. The Exchange has provided a facility on BOLT to the member-brokers to report Spot Delivery Bargains using DUS Software.

4. The transactions done on the spot basis are to be settled on the same day as the date of the contract or on thenext day as provided in section 2 (i) of the Securities Contracts (Regulation) Act, 1956. The Exchange does notguarantee the settlement of these bargains.

It may be pertinent to mention that when a member-broker is transacting with client on principal-to-principal basis,much transparency is required. To maintain this transparency, Section 15 of the Securities Contracts (Regulation) Act,1956 provides that no member-broker of a recognized Stock Exchange shall in respect of any securities enter into anycontract as a principal with any person other than a member-broker of a recognized Stock Exchange unless he hassecured the consent or authority of such person and discloses in the note, memorandum or agreement of sale orpurchase that he is acting as a principal.

The member-brokers are also required vide Rule 15 (2)(c) of Securities Contracts (Regulations) Rules, 1957, to maintainand preserve the written consent of the client in respect of contracts entered into as principals.

It may be further noted that for Principal-to-Principal transactions, no brokerage is charged to the client.

Principal-to-Principal transactions cannot be entered into in respect of scrip that is delisted or scrip, trading in which issuspended. Further the price charged for the scrip for which transaction entered into on Principal-to-Principal basisshould be within the range of open and closing price of the scrip on that date.

Cross Deals and Negotiated Deals

A cross deal is a deal between two clients of the same member-broker and negotiated deal is a deal between twomember-brokers the terms of which have been negotiated by member-brokers between themselves.

SEBI vide its Circular no. SMDRP/POLICY/CIR-32/99 dated September 14, 1999 has directed that all negotiated deals(including cross deals) are not permitted. As per SEBI directive, all negotiated deals will be permitted only if these areexecuted on screen in the price and order matching mechanism of the exchange just like any other normal trade.

15. PRINCIPAL TO PRINCIPALTRANSACTIONS

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Under SEBI guidelines on Margin Trading and Securities Lending and Borrowing advised vide SEBI’s circular No. SEBI/MRD/SE/SU/Cir-15/04 dated March 19, 2004 and circular No. SEBI/MRD/SE/SU/Cir-16/04 dated March 31, 2004; theExchange has decided to permit the members of the Exchange to provide facility of Margin Trading to their clientswithin the aforesaid SEBI guidelines.

The modalities with respect to the Margin Trading facility by the members of the Exchange to their clients are given asunder:

Corporate members with a Net-worth of Rs. 3.00 crores are eligible to provide the facility of Margin Trading to theirclients. Such eligible members are required to make a request to the Membership Department seeking Exchange’spermission in this regard.

Margin Trading facility would be only permitted in the eligible securities as notified from time to time.

The members are required to report Margin Trades on the following day through Data Upload System (DUS) providedby the Exchange.

The members are also required to place suitable internal systems to ensure that they are complying with the variousSEBI stipulations relating to Maximum borrowing, total and single client exposure etc. as per the aforesaid SEBI circularand various other circular issued in this regard by SEBI from time to time.

Based on the reporting done by the brokers to the Exchange, the Exchange discloses the Margin Trade position acrossthe market (for all its members) at the end of the day.

The members providing facility of Margin Trading to their clients would be required to submit the following certificates:

• Net-worth Certificate: The Net- worth certificate in respect of Margin Trading should be submitted in the prescribedformat as on 30th September and 31st March latest by 31st October and 30th April respectively.

• Margin Trading Compliance Certificate: The books of accounts, maintained by the members, with respect tomargin trading facility offered by them are required to be audited. The member would be required to submit anauditor’s certificate certifying the extent of compliance with the conditions of Margin Trading facility. The membersare required to submit such certificate for the half- year ending 31st March and 30th September latest by 31st

October and 30th April respectively, to the Department of Surveillance & Supervision.

Members are required to refer to SEBI Circular No. SEBI/MRD/SE/SU/Cir-15/04 dated March 19, 2004 and CircularNo. SEBI/MRD/SE/SU/Cir-16/04 dated March 31, 2004 & Exchange Notice No. 20040402-31 dated April 2, 2004for further details.

16. MARGIN TRADING

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Pursuant to the directives issued by Securities and Exchange Board of India (SEBI) vide its letter dated July 16, 2004addressed to the Exchange, the members of the Exchange are required to disclose their peak client funding detailsduring the month to the Exchange in the prescribed format through the DUS system provided by the Exchange. Thesaid data is displayed on the Exchange’s website on a monthly basis.

The disclosure has to be with regards to the extent of client funding by the broker and the number of clients for whomsuch funding has been made (for the cash segment only). The client funding for such purposes shall include the marginand settlement obligations of a client funded by the member/broker.

Member to report client funding details to the Exchange through the DUS software on a monthly basis (Exchangenotice no.20060221-10 dated Feb 21, 2006).

Client funding disclosure to the Exchange should contain the break-up of funding to Institutional / Non-Institutionalclients, towards Settlement / Margin Obligation, Margin Trading etc., the details of which are as under: -

17. CLIENT FUNDING

Item Description

No. Of Clients for Temporary Funding The number of clients who have been funded during the reporting month.

Temporary Funding of Margin on behalf The amount funded means and includes member’s own money putof Clients towards client’s margin obligations.

Temporary Funding of Settlement The member has to enter the amount funded towards settlementObligations of Institutional Clients obligations of the Institutional Clients who have been funded by him

for the reporting month. If this column is not applicable then the memberhas to enter “0”.

Temporary Funding of Settlement The member has to enter the amount funded towards settlementObligations of Non-Institutional Clients obligations of the Non-institutional clients who have been funded by

him for the reporting month. If this column is not applicable then themember has to enter “0”.

No. of Clients under Margin Trading The number of clients who have been funded towards margin tradingduring the reporting month.

Funding extended to Clients Amount funded by the member to clients under the option of Marginunder Margin Trading facility Trading. If this column is not applicable then the member has to enter

“0”.

Total Funding It will be the sum total of Temporary Funding of Margin on behalf ofClients + Temporary Funding of Settlement Obligations of InstitutionalClients + Temporary Funding of Settlement Obligations ofNon-Institutional Clients + Funding extended to Clients under MarginTrading facility

Members may refer to Exchange Notice No. 20050824-16 dated August 24, 2005 in this regard. In order to mitigatethe procedural difficulties involved in reporting the funding done by brokers with respect to transactions of small quantitiesexecuted on behalf of large no. of clients, the Securities & Exchange Board of India vide letter no. MRD/Policy/AT/55628/2005 dated December 13, 2005 has clarified that “Member brokers may be advised to exclude the funding doneby them with respect to contracts of value Rs.1 lakh or below, executed by them on behalf of their clients for thepurpose of the aforesaid requirements w.e.f December 2005.”members may refer to Exchange Notice No. 20051216-8 dated December 16, 2005 in this respect.

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In order to ensure the reliability of the IML / Internet Trading Systems used by the Trading Members, the Exchangehas decided to make it obligatory on the part of the Trading Members to get their IML / Internet Trading Systemsaudited by Certified Systems Auditor and Submit a report to the Exchange.

Accordingly, the Trading Members who have availed of the IML facility from the Exchange are advised to submit aSystems Audit Report in the prescribed format every Financial Year.

The Trading Members are required to note the following with regards to the Systems Audit:

1. The System Audit should be carried out by CISA / ISA / CISSP Certified Systems Auditor and their name &registration number should be mentioned on the certificate submitted.

2. The System Audit would have to be carried out for all the branches where IML facility is provided and one consolidatedreport should be submitted to the Exchange.

Trading member are also required to submit the following documents / certificates to Exchange.

l Network Diagram duly certified by the Vendor showing the number and location of nodes.

l SSL (Secured Socket Layer) certificate or any other similar mechanism, which adequately protects the confidentialityof trade data (Exchange Notice No. 20070517-26 dated May 17, 2007).

18. SYSTEM AUDIT

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During the course of inspections of the books of accounts and other documents of member-brokers, it has been observedthat certain member-brokers are dealing through or with other stock brokers of the same exchange /other exchangefor their proprietary trades as well as trades on behalf of their clients.

Trading through other stockbrokers raises serious issues of regulatory concerns including taking excessive exposure,executing pro account trading from multiple locations in violation of SEBI circular no. SEBI/MRD/SE/Cir-32/2003/27/08 dated August 27, 2003, possibility of over leveraging and default, etc.

With a view to address these concerns, SEBI vide its circular no: SEBI/MIRSD/CIR-06/2004 dated January 13, 2004reviewed the norms relating to trading by member-brokers/sub-brokers. Accordingly, member-brokers are required tocomply with the following:

• A sub-broker shall not be affiliated to more than one member-broker of one stock exchange.

Dealing with member of the same Exchange

• Member-broker/sub-broker of an exchange cannot deal with another member-broker/sub-broker of the sameexchange either for proprietary trading or for trading on behalf of clients, except with the prior permission of theexchange. The Exchange while giving such permission, shall consider the reasons stated by the brokers/subbrokers for dealing with brokers/sub brokers of the same exchange and after carrying out due diligence allow suchbrokers/sub brokers to deal with only one stock broker/sub broker of the same exchange. (Exchange Notice no.20040117-8 dated January 17, 2004).

Dealing with member of another Exchange

• For proprietory trading, a stock broker/sub broker of an exchange can deal with only one broker/sub broker ofanother exchange after intimating the names of such stock broker/sub broker to his parent stock exchange.

• For dealing on behalf of clients, a member-broker of an exchange can deal with only one broker of anotherexchange after obtaining necessary registration as a sub-broker.

19. TRADING THROUGH ANOTHER MEMBER

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“Sub-broker” means any person not being a member of a Stock Exchange who acts on behalf of a member-broker asan agent or otherwise for assisting the investors in buying, selling or dealing in securities through such member-brokers.

All Sub-brokers are required to obtain a Certificate of Registration from SEBI in accordance with SEBI (Stock Brokersand Sub-Brokers) Rules and Regulations, 1992, without which they are not permitted to deal in securities. SEBI hasdirected that no broker shall deal with a person who is acting as a sub-broker unless he is registered with SEBI and itshall be the responsibility of the member-broker to ensure that his clients are not acting in the capacity of a sub-brokerunless they are registered with SEBI as a sub-broker .

It is in the interest of member-brokers that they should get the books of accounts etc of the sub-brokers affiliated tothem, inspected at periodical intervals.

Member-brokers of a Stock Exchange executing transactions for and on behalf of their clients through the member-brokers of other Exchanges are to be treated as sub-brokers. These member-brokers are required to obtain a Certificateof Registration from SEBI to act as a sub-broker under SEBI (Stockbrokers and Sub-Brokers) Rules and Regulations,1992.

It is mandatory for member-brokers to enter into an agreement with all the sub-brokers in the format prescribed bySEBI. The agreement lays down the rights and responsibilities of member-brokers as well as sub-brokers.

Securities and Exchange Board of India have issued a notification in the Gazette of India dated the 23rd day of September2003, amending the Stock brokers and Sub brokers Regulations, 1992, the salient features are produced below:

• One sub-broker shall be affiliated to one member-broker of the Exchange. There shall be a privity of contractbetween the member-broker and a client introduced to the member-broker by the sub-broker affiliated to suchmember-broker.

• The sub-broker should have necessary infrastructure like adequate office space, equipment and manpower toeffectively discharge his activities.

• No director of a corporate member-broker shall act as a sub-broker to the same corporate member-broker.

• A member-broker shall not deal with a person as a sub-broker unless such person has been granted certificate ofregistration by the SEBI.

• A sub-broker shall not issue confirmation memos but the member-broker shall issue contract note directly to theclient introduced by his sub-broker.

• The delivery of securities and the payment of funds relating to the transactions shall be made directly between amember-broker and the client introduced by the sub-broker affiliated to such member-broker.

• A sub-broker shall enter into a tripartite agreement with his client and with the main member-broker specifying thescope of rights and obligations of the member-broker, sub-broker and such client of the sub-broker.

Cancellation of sub-broker registration

In the event of cancellation of sub-broker registration, the affiliated membr-broker has to inform the investors/general public about cancellation of registration of his/their sub-brokers and also advise them not to deal with suchsub-brokers. A public advertisement to this effect may be issued in a local newspaper where the sub-broker’sregistered office, head office/corporate office is situated and another in English daily newspaper with wide circulation.

20. SUB-BROKERS

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Books And Documents To Be Maintained By Sub-Brokers

Sub clause (b) under clause (1) of Section 15 of Securities Contract Regulation Act specifies the books anddocuments required to be maintained by the sub-broker. The list is as under: -

• Register of transactions (Sauda book);

• Clients ledger;

• General ledger;

• Journal;

• Cash book;

• Bank pass book;

Document should include particulars of shares and securities received and delivered to the clients.

Inspection of Sub-Brokers

Every Trading Member is required to carry out the inspection of Books and Accounts of at least 20% of its sub-brokers every year .

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A Remisier is a person who is engaged by a member-broker primarily to solicit business in securities on a commissionbasis.

The Exchange has revived the institution of Remisiers under its Rules, Byelaws and Regulations. Rules No. 216 to235 of the Rules, Byelaws and Regulations of the Exchange provide for appointment and regulation of Remisiers. TheRemisiers appointed by the member-brokers are required to be registered with the Exchange.

In this connection, it is clarified that Remisier should not be an employee of any individual member-broker or anyorganisation other than the member-broker concerned. A remisier shall not be or act as a sub-broker anywhere solong as he continues as a remisier.

Remisier is expected to solicit business for a member-broker and get commission thereon. He is not supposed toissue contract notes, confirmation memos or bills to the clients in his own name.

Remisier can operate the BOLT/IML terminal from the member’s office. However, he can not operate the terminalfrom his residence/office.

Members can start business & pay commission to remisier only after getting them registered with the Exchange.

21. REMISIER

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Trading members should place a permanent notice board, as per the prescribed format, at all their offices includingthe offices of sub-brokers, or any other offices where the trading terminals are located which should prominently displaythe following information: -

1. Name of the Trading Member

2. Address & Tel. No. of the main office of the trading member (also Name & Tel. No of the contact person in the mainoffice)

3. SEBI Registration No. of the trading member

4. BSE Investor Service Tel. No.

Apart from the notice board a list of general Do’s and Don’ts, as per the prescribed format, to be observed by theinvestors while investing/trading in the stock markets should be prominently displayed.

Trading Members are also required to ensure that a copy of their SEBI Registration Certificate is prominently displayedin all their offices.

Trading Members should also ensure that the SEBI Registration Certificate issued to the sub-broker is prominentlydisplayed at all their sub-broker’s offices. (Exchange Notice No.20050902-21 dated September 02, 2005).

22. DISPLAY OF SEBI REGISTRATION CERTIFICATE ANDNOTICE BOARD

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Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force w.e.f. July 01, 2005. As per the provisionsof the Act, all the prescribed entities shall have to maintain records pertaining to the transactions of the value andnature prescribed as under :

• All cash transactions of the value of more than Rs.10 lakhs or its equivalent in foreign currency

• All series of cash transactions integrally connected to each other which have been valued below Rs.10 laks or itsequivalent in foreign currency where such series of transactions take place within one calender month.

• All suspicious transactions whether or not made in cash.

All intermediaries are advised to ensure a proper policy framework as per the guidelines on anti-money launderingprovisions. Members are required to appoint Principle Officer under Prevention of Money Laundering Act 2002. Also,members are required to have documented procedures to implement the Anti Money Laundering provisions as envisagedunder Prevention of Money Laundering Act, 2002.

The Guidelines on Prevention of Money Laundering Standards, inter-alia require the members to:

• Ensure Customer due diligence (As stipulated under Guideline 5 of Part II of the Guidelines on Anti MoneyLaundering Provisions).

• Monitor and Report Suspicious Transactions to FIU (Financial Intelligence Unit) India. (As specified under Guidelines2.2 and 9 of Guidelines on Prevention of Money Laundering Provisions) (Exchange Notice No.20060321-15 datedMarch 21, 2006 and 20070330-27 dated March 30, 2007).

23. ANTI MONEY LAUNDERING PROVISIONS

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Member-brokers of the Exchange are not permitted to trade in unlisted securities or in scrips before being listed onthe Exchange. However, in order to facilitate member-brokers to enter into trades on behalf of their client in the scripsnot listed on the Exchange but listed on some other Exchange, as also in the scrips not listed on any Exchange, theExchange gives permission to the member-brokers to enter into Specific Bargains.

Member-brokers intending to enter into such trades are required to approach the Clearing and Settlement Dept. witha request letter alongwith the latest annual report of the Company whose shares are to be traded, the latest quotationof the scrip in the Exchange where it is listed and traded etc.

The request of the member-broker is scrutinised by the Clearing and Settlement Dept. The Dept checks whether thescrip was earlier listed/delisted, suspended by the Exchange, the reason for entering in to this deal, the present andproposed holding of the purchaser in this scrip, price band and the limit of FII holding prescribed by RBI (if the purchaseris an FII), etc., and then gives its approval on a case to case basis. In case the holding of the proposed purchaser inthe concerned scrip exceeds 5% of the paid up capital of the company after the deal is executed then the buyer wouldhave to inform the concerned stock exchange and SEBI about the purchase and the total holding in the same. Thenominal charges for granting approval to enter into specific bargains are recovered by the exchange from the member-brokers by debiting their General Charges Account.

24. SPECIFIC BARGAINS

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With a view to imparting transparency in bulk deals so as to prevent rumors /speculation about bulk deals causingvolatility in the scrip price, SEBI vide its Circular No. SEBI/MRD/SE/Cir-7/2004 dated January 14, 2004 has decided tobring about greater disclosure of such bulk deals as mentioned below:

a. The disclosure shall be made by the member-brokers to the Stock Exchange with respect to all transactions in ascrip where total quantity of shares bought/sold is more than 0.5% of the number of equity shares of the companylisted on the stock exchange.

b. The brokers shall disclose to the stock exchange the name of the scrip, name of the client, quantity of sharesbought/sold and the traded price.

c. The member-brokers shall make the disclosure to the Surveillance Department immediately upon execution of thetrade.

Single Trade: Immediately upon the execution of the order where the traded quantity either buy or sell on accountof any trade is more than 0.5% of the number of equity shares of the company listed on the stock exchange.

Cumulative Trades for the Day: Within one hour from the closure of the trading hours, where the cumulativequantity traded under any single client code on that day either purchase or sale is more than 0.5% of the numberof equity shares of the company listed on the stock exchange.

d. The Surveillance Department of the Exchanges shall disseminate to the market participants the aforesaid informationreceived from the member-brokers on the same day after market hours through its website.

25. BULK DEALS

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In order to facilitate execution of large trades, the stock exchanges are being permitted to provide a separate tradingwindow. A trade, with a minimum quantity of 5,00,000 shares or minimum value of Rs.5 crore executed through asingle transaction on this separate window of the stock exchange will constitute a “block deal”.

Trade details of BLOCK DEAL such as Deal date, Scrip code, Scrip Name, Quantity, Buy or Sell, Rate, Client codeand Client name are to be reported by the member to the Exchange through the Data Upload System (DUS). It maybe noted that members are required to upload information of each trade executed in block deal separately.

The details of BLOCK DEAL executed by the member are to be uploaded by the trading member on the same day ofexecution of trade through the DUS.

The BLOCK DEAL information uploaded by all the members will be disseminated by the Exchange to the market, onthe same day, after the end of trading hours.

Members are requested to kindly refer to Exchange Notice No. 20051108-29 dated November 8, 2005 & Notice No.20051108-28 dated November 08, 2005 issued in respect of Block Deals.

26. BLOCK DEALS

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Straight Through Processing (STP) is a mechanism that automates the end-to-end processing of transactions of thefinancial instruments. It involves use of a single system to process or control all elements of the work-flow of a financialtransaction, including what is commonly known as the Front, Middle & Back-office & General Ledger. In other words,STP can be defined as electronically capturing & processing transactions in one pass, from the point of first deal tofinal settlement.

Usage of STP enables orders to be processed, confirmed, cleared & settled in a shorter time period, more cost-effectively& with fewer errors.

Members may refer to Exchange Notice No. 20040420-12 dated April 20, 2004 wherein members have been advisedthat all institutional trades executed on the Stock exchanges would be mandatory processed through the STP systemw.e.f. July 1, 2004. Members may also refer to Exchange Notice No. 20040705-10 dated July 5, 2004 issued in respectof STP & use of Exchange allotted Unique Client Codes. In case of Institutional Clients it is mandatory for the memberbrokers use Straight Through Processing (STP) for settlement of those trades.

27. STRAIGHT THROUGH PROCESSING (STP)

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Reserve Bank of India monitors the limits for FII holdings in individual Indian Companies. The FIIs are, however,allowed to sell the securities of the companies purchased by them where the prescribed ceilings of FII investmentshave been reached, by entering into sale transactions on BOLT system.

Trades on the BOLT system in such cases can be executed only on behalf of FIIs, Mutual Funds registered with SEBI,Banks and Domestic Financial Institutions.

SALE Orders in this Segment can be entered only on behalf of the FII clients while the BUY Orders can be on behalfof any FIIs/SEBI registered Mutual Funds/Banks/or Domestic Financial Institutions. The Buy/Sell orders in this segmentare matched as per the order matching mechanism of the normal segment. In order to facilitate execution of thesedeals on-line on the BOLT System, the Exchange has devised a new segment where scrips are identified by codesfalling in 6 lakh series. For example, for entering into trades in RIL, the scrip code is “600325”

Circuit filters applicable for the respective scrips in the Rolling Settlement are also be applicable in this segment. Thesettlement cycle for these trades is the same as that of the Rolling Settlement and trades in this segment can besettled only in the demat mode. Delivery obligation originating from these sale transactions can be met by delivery ofshares standing in the names of FII only.

Non-compliance of this condition can result in imposition of financial penalties including reversal of such transactions.The trades executed on the system of the Exchange are covered under the Trade Guarantee Fund of the Exchange.Transaction charges are applicable to such transactions as if they were normal transactions on BOLT system.

These transactions are, however, excluded from payment of margins, but the member-brokers are required to markthese trades as ‘FI’ trades at the time of order entry itself. These trades are also excluded from computation of intra-day turnover or gross exposure limits of the member-brokers as applicable to trade on behalf of domestic financialinstitutions, FIIs, banks and Mutual Funds registered with SEBI.

28. TRANSACTIONS IN SCRIPS WHERE FII LIMIT HAVEBEEN REACHED

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Member-brokers of the Exchange are permitted to issue advertisement to advertise their products and services offeredto their clients.

Advertisements so issued shall be in conformity with Regulation 17 and Bye- Law-358 of the Rules Bye- Laws andRegulations of the Exchange and as per the Code of Conduct specified in Schedule II of Regulation 7and 15 of SEBI(Stock Brokers and Sub-brokers) Regulations, 1992 respectively.

Member-brokers are required to comply with the following:

1. The content of the advertisements, brochures, etc. should be related only to the nature of services that stockbrokercan offer in respect of sales and purchase of shares and securities. The advertisement should not containrecommendations regarding purchase or sale of share or security of any particular company.

2. The advertisement can be published by a member-broker individually or jointly with other member-brokers so asto enable small brokers to pool their resources for publicity.

3. The advertisement should mention the name/title as recorded for the membership of the Stock Exchange alongwiththe code number allotted by the Securities and Exchange Board of India. It can also include the names of the sub-brokers affiliated with the broker. The member-broker should also designate and authorise and name the authorisedperson in the publication to ensure the correctness of the information given in the advertisement and prior approvalof the Stock Exchange should have been obtained in respect of such authorized person. The authorised personwill be specifically responsible when two or more member-brokers jointly advertise for brokerage business.

4. (a) The member-brokers should ensure that any information given in the advertisement must be correct andaccurate and contain matters of objectivity ascertainable facts, which should be capable of substantiation.

(b) It should not have any adverse reference direct or indirect regarding the reputation of the other member-brokers of the Stock Exchange and also of the Stock Exchange.

(c) The advertisement should not contain anything which is otherwise prohibited for publication under therelevant Act, unwarranted, misleading information or make any promises.

5. The Advertisement should not include publicity for any party other than the member-broker himself and it shouldnot contain any reference to any person, firm or institution.

6. The member-broker should not allow his or his firm’s name to be advertised by others or allow his or his firm’sname to be published in the advertisement of others.

7. The member broker should submit a copy of the advertisement to the Membership Department of the Exchangeauthorities as soon as it is published. The Exchange Authorities will have the cease and desist powers in thisbehalf.

8. If a member-broker violates any of the above Regulations for the advertisement, he is liable to be penalized for thesame by the Stock Exchange authorities and/or SEBI.

9. If the Stock Exchange authorities levy any penalty or take any disciplinary action against the member-broker, e.g.,by way of suspension or declaring him as defaulter etc., it should be immediately made public by the StockExchange authorities, and the concerned member-broker should not advertise during the period of suspension.

29. ADVERTISEMENT

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As per the Securities Contracts (Regulation) Rules, 1957 a member of a stock exchange should not be engaged as aprincipal or employee in any business other than that of securities except as a broker or agent not involving any personalfinancial liability.

Similarly a designated director should not be involved in any other business or render professional services in anycapacity or work as an employee. In case of corporate member, a designated director should not be a member in hisindividual capacity of other stock exchange (s). In case a member is a partnership firm, no person shall at the sametime be a partner in more than one partnership firm.

30. INVOLVEMENT IN OTHER BUSINESS / ANY OTHERCAPACITY

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Under Rule 12 of the Securities Contract (Regulation) Rules 1957, the member-brokers are required to have theiraccounts audited by a qualified Chartered Accountant and submit an audit report to the Exchange. The format of thereport to be submitted by the auditor has been prescribed in the circular No F.1/5/SE/83 dated May 31, 1984 issuedby the Ministry of Finance, Government of India.

The audit of accounts of the member-brokers should be completed within 6 months from the close of the financialyear. The member-brokers are required to submit the audited accounts alongwith the Audit Report to the Exchangewithin 30 days of its receipt. All active members including representative members are required to submit the AuditReport. An active member of the Stock Exchange refers to a member-broker who has done business in securitieseven for a single day in the accounting year.

All the active member-brokers are also required to submit a Networth certificate from their Chartered Accountant on ahalf yearly basis as on March 31 and September 30. The Exchange has prescribed that at the time of admission theminimum net-worth for Corporate as well as Individual members as Rs. 50 lakhs and on becoming member this minimumnet-worth should be maintained by them at all times. In case of members other than corporate members, they arerequired to maintain a minimum Networth of Rs. 30 lakhs. In case of Composite Corporate Members, the minimumnet-worth for each additional component membership is required to be 50% of the original amount.

The member-brokers are required to submit the Audit Report, audited accounts and the Networth certificate as onMarch 31 to the membership Department of the Exchange. The due date for submission of the Audit Report, AuditedAccounts and Networth Certificate as on March 31 is September 30 every year.

The member-brokers observing an accounting period other than the financial year are also required to submit theaudited accounts and Networth certificate as on March 31. The Audit Report/Networth Certificate is required to besubmitted in original, it should be on the letterhead of the Chartered Accountant, signed by the Chartered Accountantand should bear the seal of the firm.

Networth Certificate for the half year ending September 30 is required to be submitted by December 31. NetworthCertificate as on March 31 is required to be submitted on the basis of audited accounts while that for the half yearended September 30; the same may be submitted on the basis of unaudited accounts.

31. AUDITED ACCOUNTS AND NETWORTH CERTIFICATE

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Directives are issued by SEBI and stock exchanges from time to time for member-brokers to follow, which inter-aliaincludes margin requirements, smoothly functioning of pay in/ payout trading restrictions, base minimum capital etc.Submission of audit reports alongwith the annual accounts to the stock exchange and payments of turnover fees toSEBI are the other requirements. In view of above, member-brokers are advised to ensure compliance of the following:

i. The member-broker is not involved in any other type of business other than the securities business.

ii. The Member-broker should not have entered into transactions during period of his suspension or other sanctions.

iii. The member-broker has not transacted with suspended/defaulter members or any other members.

iv. The member-broker does not have any dealings with unregistered sub-brokers.

v. The member-broker has informed the stock exchange of his defaulting client and defaulting sub brokers to otherbrokers where same sub broker is registered.

vi. In line with SEBI Circular No. SMD/DBA II/CIR- 31 /2001. dated May 31, 2001, a member-broker has informed theinvestors/general public about cancellation of registration of his/their sub brokers and also advised them not todeal with such cancelled sub brokers.

vii. If a member-broker has undertaken underwriting, whether the SEBI (Underwriters) Regulations, 1993 have beencomplied with by the member-broker.

viii. If any issue has devolved on the member-broker, details of amount devolved and settlement thereof.

ix. In case of any change in the status and constitution of the stock broker, whether the stock broker has obtainedprior approval of SEBI to continue to buy, sell or deal in securities in line with Rule 4 (c) of SEBI (Stock Brokers andSub Brokers) Rules, 1992.

x. All organisation associated with the securities markets including intermediaries as mentioned in Section 12 of theAct are required to frame a Code of internal procedures and conduct as near to the Model Code specified inSchedule I of SEBI (Prohibition of Insider Trading) Regulations, 1992.

xi. No Member-broker shall, for the purpose of creating or inducing a false market in security,

• Enter any order or orders for the purchase of such security with knowledge that an order or orders of substantiallythe same size, and at substantially the same price, for the sale of any such security, has been or will be entered byor for the same or different parties, or

• Enter any order or orders for the sale of such security with the knowledge that an order or orders of substantiallythe same size, and at substantially the same price for the purchase of such security has been or will be entered byor for the same or different parties.

32. COMPLIANCE WITH REGULATORY DIRECTIVES

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Member-broker shall at all times abide by the Code of Conduct as specified under Regulation 7 of Schedule II of theSEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 which is as under:

A. GENERAL

(1) Integrity: A stockbroker shall maintain high standards of integrity, promptitude and fairness in the conduct of allhis business.

(2) Exercise Of Due Skill And Care: A stockbroker shall act with due skill, care and diligence in the conduct of all hisbusiness.

(3) Manipulation: A stock-broker shall not indulge in manipulative, fraudulent or deceptive transactions or schemesor spread rumours with a view to distorting market equilibrium or making personal gains.

(4) Malpractices: A stock-broker shall not create false market either singly or in consent with others or indulge in anyact detrimental to the investors interest or which leads to interference with the fair and smooth functioning of themarket. A stockbroker shall not involve himself in excessive speculative business in the market beyond reasonablelevels not commensurate with his financial soundness.

(5) Compliance with Statutory Requirements: A stock-broker shall abide by all the provisions of the Act and therules, regulations issued by the Government, SEBI the Board and the stock exchange from time to time as may beapplicable to him.

B. DUTY TO THE INVESTOR

(1) Execution Of Orders: A stock-broker, in his dealings with the clients and the general investing public, shallfaithfully execute the orders for buying and selling of securities at the best available market price and not refuse todeal with a Small Investor merely on the ground of the volume of business involved. A stock-broker shall promptlyinform his client about the execution or non-execution of an order, and make prompt payment in respect of securitiessold and arrange for prompt delivery of securities purchased by clients.

(2) Issue Of Contract Note: A stockbroker shall issue without delay to his client a contract note for all transactions inthe form format specified by the stock exchange.

(3) Breach Of Trust: A stock-broker shall not disclose or discuss with any other person or make improper use of thedetails of personal investments and other information of a confidential nature of the client which he comes to knowin his business relationship.

(4) Business And Commission:

(a) A stockbroker shall not encourage sales or purchases of securities with the sole object of generating brokerageor commission.

(b) A stock-broker shall not furnish false or misleading quotations or give any other false or misleading advice orinformation to the clients with a view of inducing him to do business in particular securities and enabling himselfto earn brokerage or commission thereby.

(5) Business of Defaulting Clients: A stock-broker shall not deal or transact business knowingly, directly or indirectlyor execute an order for a client who has failed to carry out his commitments in relation to securities with anotherstock-broker.

33. CODE OF CONDUCT FOR MEMBERS

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(6) Fairness to Clients: A stock-broker, when dealing with a client, shall disclose whether he is acting as a principalor as an agent and shall ensure at the same time that no conflict of interest arises between him and the client. Inthe event of a conflict of interest, he shall inform the client accordingly and shall not seek to gain a direct or indirectpersonal advantage from the situation and shall not consider clients’ interest inferior to his own.

(7) Investment Advice: A stock-broker shall not make a recommendation to any client who might be expected to relythereon to acquire, dispose of, retain any securities unless he has reasonable grounds for believing that therecommendation is suitable for such a client upon the basis of the facts, if disclosed by such a client as to his ownsecurity holdings, financial situation and objectives of such investment. The stockbroker should seek such informationfrom clients, wherever he feels it is appropriate to do so.

(7A) Investment Advice in publicly accessible media :

(a) A stock broker or any of his employees shall not render, directly or indirectly, any investment advice about anysecurity in the publicly accessible media, whether real - time or non real-time, unless a disclosure of his interestincluding the interest of his dependent family members and the employer including their long or short position inthe said security has been made, while rendering such advice.

(b) In case, an employee of the stockbroker is rendering such advice, he shall also disclose the interest of his dependentfamily members and the employer including their long or short position in the said security, while rendering suchadvice.

(8) Competence of Stock Broker: A stockbroker should have adequately trained staff and arrangements to renderfair, prompt and competent services to his clients.

C. STOCK-BROKERS VIS-A-VIS OTHER STOCK-BROKERS

(1) Conduct of Dealings: A stock-broker shall co-operate with the other contracting party in comparing unmatchedtransactions. A stockbroker shall not knowingly and willfully deliver documents, which constitute bad delivery andshall co-operate with other contracting party for prompt replacement of documents that are declared as baddelivery.

(2) Protection of Clients Interests: A stock-broker shall extend fullest co-operation to other stock-brokers in protectingthe interests of his clients regarding their rights to dividends, bonus shares, right shares and any other rightrelated to such securities.

(3) Advertisement and Publicity: A stockbroker shall not advertise his business publicly unless permitted by thestock exchange.

(4) Inducement of Clients: A stockbroker shall not resort to unfair means of inducing clients from other stock- brokers.

(5) False or Misleading Returns: A stock-broker shall not neglect or fail or refuse to submit the required returns andnot make any false or misleading statement on any returns required to be submitted to the Board and the stockexchange.

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The Exchange has reviewed and rationalised the existing norms for imposing late fees, fines and penalties for theCash segment. The revised norms have been approved by the Disciplinary Action Committee (DAC) of the Exchangein its meeting held on February 27, 2008.

The consolidated list of revised norms shall be applied for the violations observed during the course of inspection orotherwise to be conducted w.e.f. April 01, 2008. The actions including fines for violations are only indicative. In case ofa large number of instances of violation involving large amount of funds / large quantity of securities or instances ofrepetitive nature, the DAC may take such strict action as it may deem fit including levy of higher fines / suspension /expulsion. (Exchange Notice No.20080307-8 dated March 07, 2008).

List of indicative penalty in respect of violations observed during inspections or otherwise in Cash segment, Derivativeand Debt segment

34. PENALTY NORMS

No. Details of contravention Penalty (Fine in Rupees)

I - Dealings with Clients

1 Client Registration

(a) Documents not executed Rs.10,000/- per client

(b) Inclusion of contravening clauses / Omission of material details Rs.10,000/-

(c) Otherwise not in the prescribed format Advice

2 Non-maintenance of Books of Accounts,Records & Documents Rs. 50,000/-including non maintenance of Client-wise Accounts for Funds /Securities.

Mis-utilisation of clients’ funds or securities

3 Bank and Demat Account Operations

(a) Separate Clients Bank or Demat Account not maintained Rs.10,000/-for clients’ transactions

(b) Payin / Payout not received from / In excess of 2% of number ofdelivered to respective clients’ accounts instances, fine of Rs. 10,000/-

Otherwise, Advice

(c) Non-segregation of Own and Clients’ Funds or Securities In excess of 2% of number ofinstances, fine of Rs.10,000/-

Otherwise, Advice

(d) Delay in release of payout of Funds / Securities to clients In excess of 2% of number ofinstances, fine of Rs.10,000/-

Otherwise, Advice

(e) Delayed / Non payment of Dividend 0.5 % of the amount (Rs.10,000/-(Delay in Excess of 90 days) if amount is not known)

4 Excess Brokerage charged TM to be advised to refund theexcess brokerage charged to theconstituents and fine of Rs.5,000/-or Excess Brokerage whichver ishigher.

If not charged at all - advice

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5 Use of Multiple Codes for client or own trades Advice

6 Contract Note related contraventions

(a) Non issue / delay in issue/ issued with material discrepancies Rs.10,000/-or contract notes not signed by Authorised Signatory or Duplicatesor Copies / Proof of dispatch of contract notes not maintained

Non-compliances related to Spot Transaction

(b) Otherwise not as prescribed Advice

Non-compliances related to STP system

7 Quarterly Statement of Accounts for funds or securities not sent In excess of 2% of number ofclients, fine o Rs10,000/-

Other discrepancies Advice

8 Cash dealings with clients Fine of 0.1% of the value in excessof Rs 10 lakhs.

Otherwise - Advice

9 Non-disclosure of trading on own account to clients Advice

Exclusive Email-ID for investors’complaints not created ornot displayed

10 Transfer of Trades / Errors at the time of order entry In excess of 2% of number of ordersexecuted, fine of 0.1% of he value oftrades transferred

11 Margin Trading related contraventions

(a) Agreement not executed with clients Rs. 5,000/- per client

(b) Margin Trading facility in scrips other than permitted Rs. 10,000/-

(c) Short collection of margin in excess of 20% Rs. 10,000/-

(d) Other procedural contraventions Rs. 10,000/-

II - Dealings with Intermediaries

1 Dealing with Unregistered Intermediaries Rs.1,00,000/- per UnregisteredIntermediary.

Further, member is to be advisedto ensure that the entities stop dealingas unregistered intermediaries and bedirected to withdraw the terminal(s), ifany, Unregistere allotted to suchentities, immediately.

In addition to monetary fine,suspension of the trading membershipmay also be considered dependingupon the gravity of the violation,incases where stances of ealings withmore than 5 Unregisteredntermediaries are observed.

2 Doing business for / through other TMs or sub-brokers of Rs.10,000/- for dealing with memberother TMs without for prior approval of the Exchange. of the same Exchange

With brokers / Sub-brokers of otherExchanges - Advice

No. Details of contravention Penalty (Fine in Rupees)

48

3 Inspection of active Sub-Brokers / Branches not done Advice

Sharing of Brokerage / Commission, except as permittedunder the Bye-Laws of the Exchange.

Non-compliances by Subsidiaries of Regional Exchanges.

III - Trading System & Office Management

1 Operation of Trading Terminals by persons other than an AdviceApproved User / Person

2 Allowing Trading Terminals to be operated by persons without AdviceBCFM Certification

3 (a) Unauthorised extension of BOLT or IML Terminal / Rs.50,000 per terminal.Commencement of Internet trading without prior approval

If trading terminals are observed to beused for carrying out illegal tradingactivity, suspension of the tradingmembership may also be considereddepending on the gravity of theviolation.

(b) Errors in upload of Terminal details to the Exchange In excess of 5 terminals, fine ofRs 5,000/- per terminal

4 Non-display of Notice Board or SEBI Registration Certificate Rs.10,000/-

5 Non-appointment of Compliance Officer Rs.10,000/-

6 Execution of trades on own account from locations other than Rs.10,000/-those permitted

7 Evasion of margin by entering wrong client code 0.3% of the value of trades orRs.25,000/- whichever is higher.

8 Not following the advertisement code of the Exchange Rs.5,000/-

9 Non-compliance with PMLA requirements Rs.10,000/-

10 Books of Accounts, Registers, Records & Documents not in Adviceprescribed format / not maintained properly or not submittedfor inspection

11 Post Compliance Inspection

(a) Submitting wrong Compliance Certificate Rs.15,000/-

(b) Repeated violations observed in both, last normal inspection Fines prescribed for violations and post compliance inspection and where member was warned. observed in routine inspection.

(c) Repeated violations observed in both, last routine inspection Twice the amount of penalty levied inand post compliance inspection and where penalty was levied routine inspection.

IV - Margin reporting requirement (Derivative segment)

1 ‘% of factual wrong reporting of margin collection from constituents to total margin reported as collected

Upto 5% Warning

> 5% and upto 10% 0.5% of wrongly reported amount

> 10% and upto 25% 2% of the wrongly reported amount

> 25% and upto 50% 2% of the wrongly reported amountand suspension from trading for 1 day

No. Details of contravention Penalty (Fine in Rupees)

49

> 50% 2% of the wrongly reported amountand suspension from tradingfor 5 days

2 ‘% of (margin available but not properly accounted for / received from third parties) to total margin reportedas collected

Upto 5% Advice

> 5% and upto 10% 0.5% of the wrongly reported amount,subject to maximum of Rs 25,000/-

> 10% and upto 25% 0.75% of the wrongly reportedamount, subject to maximum ofRs 50,000/-

> 25% and upto 50% 1% of the wrongly reported amount,subject to aximum of Rs 75,000/-

> 50% 1.25% of the wrongly reportedamount, subject to maximum ofRs 1,00,000/-

Note :- All the requisite records, if available/maintained by the trading members in electronic form, shall be consideredas compliance.

No. Details of contravention Penalty (Fine in Rupees)

50

INDEX – RULES/BYE-LAWS/REGULATIONS/NOTICES

Contract Note:

1 Issue of contract notes. Bye-law - 219 55

Exchange Notice No.5166/93 dated November 11, 1993. 56

2 Contract Note format prescribed by the Exchange. Exchange Notice No.1515/99 dated May 7, 1999 57 - 63

Exchange Notice No. 20021109-9 dated November 9, 2002. 64 - 69

3 Contract Note Format Exchange Notice No. 20060627 -18 dated June 27, 2006 70

4 Contract Note Format Exchange Notice No. 20060630 -2 dated June 30, 2006 71

5 Electronic Contract Notes Additional Conditions Exchange Notice No. 20050909-13 dated September 9, 2005 72 - 74

6 Signature on Contract Notes & numbering of Exchange Notice Nos. 4914/96 dated August 13, 1996 and 75 - 76Contract Notes Exchange Notice No.5419/96 dated September 14, 1996.

7 Board Resolution / Power of Attorney for signing of Exchange Notice No.1024/98 dated March 20, 1998. 77Contract Notes to be submitted to the Exchange

8 • Issue of contract notes within 24 hours Bye-law - 247 A 78 - 79 • Acknowledgement on contract notes Exchange Notice No. 4914/96 dated August 13, 1996 75

• Proof of delivery in case of despatchthrough courier or post

9 • Duplicates of the contract notes issued to be Exchange Notice No. 4850/97 dated December 10, 1997. 80 - 81maintained.• Counter foils to be maintained with adequate details.

10 Details of the trade to be attached in case of issue of Exchange Notice No.4646/97 dated November 29, 1997 82 - 83consolidated contract notes.

11 Provision for printing of PAN of the member and / or Exchange Notice No. 20020930-4 dated Sept 30, 2002. 84PAN of the constituents, wherever the value ofcontract exceeds Rs. 1 lakh.

12 Compulsory PAN in Derivatives Exchange Notice No.20050926-11 dated September 26, 2005 85

13 Brokerage to be charged. Regulation 14 86 - 87

14 Commission terms for remisiers & sharing of Brokerage Exchange Notice No. 20051207-10 dated December 07, 2005 88

Off Market Transactions

15 Contract notes to be issued for trades not executed Exchange Notice No. 24512/99 dated Sept. 2, 1999. 89through the BOLT.

16 Issue of contract note for transactions in securities Bye - law - 26. 90not listed/permitted on the Exchange.

17 Written consent to be taken from the client Bye - law - 199 90for entering into a principal to principal transactions. Exchange Notice No. 4914/96 dated August 13, 1996.

18 Contract notes to be issued in Form B Exchange Notice No. 4914/96 dated August 13, 1996 75for entering into principal to principal transactions.

19 Transactions done on a spot basis is to be reported to SEBI Circular No. SMD/RCG/CIR/(BKG)/293/95 91the Exchange. dated March 14, 1995.

Sr. Particulars Rule/Bye-law/ Regulation/ Notice No. Page No.No.

51

20 Transactions done on a spot basis is to be reported to SEBI Circular No. SMD/RCG/CIR/(BKG)/293/95 91 the Exchange within the prescribed time limit. dated March 14, 1995

Exchange Notice No. 20040306-9 dated March 6, 2004. 92 - 97

21 Transactions done on a spot basis to be settled Section 2(i) of the SCRA, 1956 98within the prescribed time limit.

Books of Accounts

22 Books of accounts to be maintained. Reg. 17(1) of the SEBI (Stock Brokers and Sub Brokers) 99Rules, 1992

Rule 15 of SC (R ) Rules,1957 100

23 Maintenance of books of accounts, records and Exchange Notice No.20050805-20 dated August 5,2005 & 101 - 104documents Exchange Notice No. 20051227-18 dated December 27, 2005

Client Monies

24 • Client’s funds to be routed through designated ‘ Bye-law - 247A 78 - 79Client Account’.

• Segregation of own and client transactions Exchange Notice No. 7031/94 dated December 6, 1994 105in separate bank accounts

• Client Account not to be used for non-specified Exchange Notice No.4850/97 dated December 10, 1997 80 - 81purposes.

• Client account not to be used for own / misuse Exchange Notice No. 20020917-2 dated September 17, 2002. 106of funds / unathorised transfer of funds from oneclient’s account to another client’s account.

• Payments of funds to clients• Payment of dividend / reconciliation of dividendaccount

25 Transaction with Clients in Cash Exchange Notice No. 20020917-2 dated September 17, 2002 106(Mode of Payment)

Exchange Notice No. 20030903-5 dated September 3, 2003 107

Exchange Notice No.20050324-21 dated March 24, 2005 108

Clients’ Securities

26 • Securities due to the clients transferred to the Bye - law - 247A 78 - 79members’ beneficiary account.

• Securities due to one client transferred to another Exchange Notice Nos. 7031/94 dated December 6, 1994 105client OR Securities due to the clients used formeeting the pay-in obligation of the member/otherclient.

• Delay in delivery of securities to clients. Exchange Notice No.4850/97 dated December 10, 1997 80 - 81

Exchange Notice No. 20020917-2 dated September 17, 2002. 106

27 Deliver / Receive securities other than from respective Exchange Notice No. 20030903-5 dated September 3, 2003. 107Clients Beneficiary Account or under approvedscheme.

28 Half yearly statement of accounts for funds / Exchange Notice No. 20020906-3 dated Sept 6, 2002. 109securities to be sent to the clients

Exchange Notice No. 20030114-9 dated January 14, 2003 110

Sr. Particulars Rule/Bye-law/ Regulation/ Notice No. Page No.No.

52

Client Registration

29 • Client Registration Forms and Client database Exchange Notice No. 20040827-11 dated August 27, 2004 111 - 136(Uniform Documentary Requirements for trading)

• Member Client Agreement Format• Uniform Risk Disclosure Document• Model Tripartite Agreement• Broker – sub-broker Agreement

30 Updatation of Financial Details of the client Exchange Notice No. 20061120- 9 dated November 20, 2006 137

31 KYC Segregation of Mandatory & Voluntary Documents Exchange Notice No. 20060704 -6 dated July 04, 2006 138

32 Disclosure of Proprietary Trading Exchange Notice No. 20031125–7 dated November 25, 2003 139

Dealing with Intermediaries

33 Registration of Remisiers Exchange Notice No. 2628/97 dated June 9, 1997 140

34 Sharing Commission/brokerage only after Bye - law - 218(a) 141registering such persons as remisiers with the Exchange.

Rule 216 – Rule 235 141 - 147

Exchange Notice No. 2628/97 dated June 9, 1997. 140

Exchange Notice No. 20031006 – 21 dated October 6, 2003 148

35 Registration of sub-brokers Exchange Notice No.62311/2000 dated September 14, 2000. 149

36 Members of other Exchanges routing orders of their clients Exchange Notice No.54809/2000 dated July 1, 2000 150 through BOLT, to be registered as Sub-brokerswith SEBI.

37 Affiliation of sub-brokers with members. Exchange Notice No. 20030228-3 dated February 28, 2003. 151

Submission of Audit Report, Audited Accounts & Networth Certificate

38 Maintenance of Minimum Networth requirement. Exchange Notice No. 20030905-1dated September 5, 2003. 152

39 Submission of Audit Report, Annual Accounts and Exchange Notice No. 20040524-10 dated May 24, 2004. 153 - 160Networth Certificate.

Unique Client Code

40 Entering correct/unique client codes while placing the Exchange Notice Nos. 93424/2001dated July 23, 2001 161 - 162orders in the system and mapping the client codewith PAN/ Passport etc. in the back office and entering Exchange Notice No. 20040128–3 dated January 28, 2004 163the client details on BOLT

41 Penalty structure for modification of client codes. Exchange Notice No. 20040407-13 dated April 7, 2004 164

Exchange Notice No. 20041015-6 dated October 15, 2004 165

42 Revision of penalty structure for modification of Exchange Notice No. 20060221-11 dated February 21, 2006 166 - 167client codes in the post-closing session

43 PAN Made compulsory Exchange Notice No. 20060927 -21dated September 27, 2006 168 - 169

44 Penalty for non-registeration of UCC along with PAN Exchange Notice No. 20061229 -26 dated December 29, 2006 170details

45 Penalty for habitual offenders, who violate the require- Exchange Notice No. 20080307-7 dated March 07, 2008 171ment of timely updation of UCC along with PAN details

Sr. Particulars Rule/Bye-law/ Regulation/ Notice No. Page No.No.

53

Other Irregularities

46 Done business on behalf of suspended / defaulter / Bye- Law 358 (vi) 172expelled members without obtaining priorpermission of the Exchange.

47 Incomplete / Non-maintenance of registers Exchange Notice No. 4850/97 dated December 10, 1997 80 - 81(Register of Securities/ Register of Transactions /Register of Complaints / Dividend ledger /Margin Deposit Book)

48 Involved in Fund-based activities. Rule 8(1)(f) and Rule 8(3)(f) of SC(R) Rules, 1957. 173

SEBI Circular No. SMD/POLICY/ CIR-6/97 dated May 7, 1997 174

49 Member / Partners / Designated Directors involved Rule 8(1)(f) of the SC (R) Rules, 1957.in business other than securities business.

50 Appointment of Compliance Officer. Exchange Notice No. 20021001-5 dated October 1, 2002. 175-176

51 Advertisement Code. Exchange Notice No. 104615/2001 dated November 12, 2001. 177- 179

Regulation 17 and Bye-law 358 (xi)

52 Review of norms relating to trading by members/ Exchange Notice No. 20040117-8 dated January 17, 2004. 180sub-brokers.

53 Display of Notice – Board ( Compliance Exchange Notice No. 20050902-21dated September 2, 2005 181 - 182Requirements for Trading Members)

54 Email ID for investor’s grievances Exchange Notice No. 20070131 -11 dated January 31, 2007 183

55 PMLA requirements Exchange Notice No. 20060321 -15 dated March 21, 2006 184 - 186

Exchange Notice No. 20070330 -27 dated March 30, 2007 187

56 Client Margin Reporting Exchange Notice No. 20080211- 19 dated February 11, 2008 188

Trading Terminals

57 Installation of BOLT Terminals other than at members’ Exchange Notice No. 104616/2001 dated November 12, 2001. 189registered offices, branch offices and registeredsub-brokers office.

58 “Pro-account” trading terminal Exchange Notice No. 20030909-1 dated September 9, 2003. 190

59 BOLT Terminal operation by Remisier Exchange Notice No. 20040205-13 dated February 5, 2004. 191

60 Registering / Uploadingof IML/TWS location Exchange Notice No.20050808-26 dated August 8, 2005 192 - 193

Information Exchange Notice No. 20050930-13 dated September 30, 2005 194 -195

Exchange Notice No.20051004-13 dated October 4, 2005 196

61 TWS/IML Registration on BOLT & FAQ‘s on the same Exchange Notice No. 20050823-20 dated August 23, 2005 197 - 198

Bulk Deals

62 Bulk Deal Disclosures Exchange Notice No.20040216-10 dated Feb 16, 2004 199

Exchange Notice No.20040311-7 dated March 11, 2004 200

63 Bulk Deal reporting through DUS Software Exchange Notice No.20040722- 11 dated July 22, 2004 201 - 205

Block Deals

64 Modalities for Block deal Exchange Notice No. 20051108-28 dated November 8, 2005 206 - 209

65 Disclosure of Trade details of Block Deals Exchange Notice No. 20051108-29 dated November 8, 2005 210 - 213

Sr. Particulars Rule/Bye-law/ Regulation/ Notice No. Page No.No.

54

Sr. Particulars Rule/Bye-law/ Regulation/ Notice No. Page No.No.

Margin Trading

66 Margin Trading Exchange Notice No. 20040402-31 dated April 2, 2004 214 - 216

SEBI Circular No. SEBI/MRD/ SE/SU/ 217 - 224Cir-16/04 dated March 31,2004

Client Funding

67 Information regarding Client Funding by Members Exchange Notice No. 20041029-13 dated October 29, 2004 225

Exchange Notice No. 20050824-16 dated August 24, 2005 226 - 227

Exchange Notice No. 20051216-8 dated December 16, 2005 228

68 Penalty Norms for not uploading client funding details Exchange Notice No.20060221-10 dated February 21, 2006 229

Securities Transaction Tax ( STT )

69 Securities Transaction Tax (STT) Exchange Notice No.20040927-13 dated September 27, 2004 230 - 254

Exchange Notice No. 20041005-7 dated Oct 5, 2004 255

Exchange Notice No.20050520-14 dated May 20, 2005 256

Straight Through Processing ( STP )

70 Mandatory use of STP system for all Institutional Exchange Notice No.20040420-12 257 - 258 trades executed on the Stock exchanges dated April 20, 2004

71 STP & use of exchange allotted Exchange Notice No.20040705-10 259 - 263Unique Client Codes dated July 5, 2004

Penalty Norms

72 Penalty Norms - Cash Segment Exchange Notice No. 20031112 – 5 dated November 12, 2003 264 - 269

Exchange Notice No.20041019-4 dated October 19, 2004 270 - 271

Exchange Notice No.20051102-5 dated November 2, 2005 272 - 282

73 Penalty Norms for inspection of trading members Exchange Notice No. 20080307-8 dated March 07, 2008 283

74 Penalty norms for inspection of books of accounts Exchange Notice No.20060221-12 dated February 21, 2006 284 - 288& other documents

75 Introduction of norms for imposition of late fees / fines / Exchange Notice No.20051102-6 dated November 02, 2005 285 - 289and penalties WDM / RDM / Corporate Debt Segment

76 Penalty Structure for non-registration Exchange Notice No.20060331-6 dated March 31, 2006 290 - 291of client codes by the stipulated time

55

Contract Notes

Bye-Law 219

219. (a) Members shall issue without delay to non-members contract notes in the form prescribed under the relevantregulations in respect of all bargains made for and on their behalf as agents and when dealing as Principals.

(b) The contract notes rendered by members to non-members shall state that the contract is subject to theRules, Bye-laws, Regulations and usages of the Exchange and subject to arbitration as provided in theRules, Bye-laws and Regulations of the Exchange and subject to the jurisdiction of the courts in Bombay.The contract notes shall not contain any provision inconsistent with the Rules, Bye-laws and Regulations ofthe Exchange. The names of the partners or the sole proprietor of the firm shall be printed on the contractnotes. The contract notes shall also be in such form as will provide that the words “member(s) of the StockExchange, Bombay” shall immediately follow the signature.

1 Amended by Governing Board Resolution dated 21.1.93 and approved by SEBI on 15.2.93.

56

Notice no : 5116/93

Notice date : November 11, 1993

Contents:

It has been brought to our notice that some members of the Stock Exchanges are found wanting in the observance ofthe following requirements. It is also noticed that when detected, members take the plea of ignorance or market practiceto justify their failure. Members are hereby warned to be careful in future in the observance of the following:

Contract Notes :

(a) Contract notes should invariably be issued to the clients.

(b) Such contract notes must conform to statutory format.\

(c) Brokerage should be shown separately in the contract notes.\

(d) In case of contracts entered into by members on a principal-to-principal basis with their clients, contract notesshould be issued in Form B and written permission, in respect of each such transaction , should be taken fromclients and preserved by the member.

(e) Contract notes should be signed by authorised persons.

Service to Investors :

(a) Brokers should pass on to the clients the correct rate at which the transactions were executed.

(b) Brokerage should be charged within the limit permitted under the Regulations.

(c) There should be no unjustified delays between pay-outs and the transmission of shares/monies. If there is adelay, record of reasons for such delay should be available.

Regulatory Aspects :

(a) Members should maintain all required books of accounts and other documents.

(b) There should be compliance with trading restrictions imposed by the Stock Exchange.

(c) There should be no trading in unlisted securities and in securities prior to their admission to dealings by theExchange.

All members may, therefore, note that in case such irregularities as stated above are found during the inspection oftheir books of accounts and other documents, they will be liable for disciplinary action including suspension under theRules, Bye-laws and Regulations of the Exchange.

Secretary

57

Notice no : 1515/99Notice date : May 7, 1999Subject : Amendments to the Contract Note.

Contents :

Sub : Amendments to the Contract Note

1. The members are issuing Contract Notes to their constituents in Form-A or Form-B for the transactions enteredinto on their behalf or with them respectively. On the reverse of the Contract Note, important Bye-laws relating toarbitration, etc., which can be resorted to in the event of any dispute between the contracting parties, are printed.The Arbitration and Conciliation Act, 1996 has since come into effect with effect from January 25, 1996.Consequently, the relevant provisions regarding arbitration, etc., contained in the Bye-laws of the Exchange havebeen amended after obtaining approval from SEBI and have come into force with effect from August 29, 1998.The Income-tax Rules, 1962 have also been amended requiring the members to quote PAN No./GIR.No. of theconstituents in all documents pertaining to transactions of a value exceeding Rs.10 lakhs for sale or purchase ofsecurities.

2. The sub-brokers appointed by a member are allowed to issue Confirmation Memo to their constituents in respectof the transactions entered into by them on their behalf. Some of the members have represented to the Exchangethat there is a need to prescribe the format of this Confirmation Memo. Hence, it has become necessary toincorporate the above changes in the Contract Note and also to devise a format of the Confirmation Memo to beissued by sub-brokers to their constituents.

3. The members are hereby informed that, the Governing Board of the Exchange in its meeting held on April 29,1999, has approved the relevant amendments to the Contract Note to be issued by the members to their constituentsand also the format of the Confirmation Memo to be issued by the sub-brokers to their constituents by adding newRegulation 14.3 after Regulation 14.2 of the Rules, Bye-laws and Regulations of the Exchange.

4. The revised formats of the Contract Note in Form A and Form B (Regulation 14.2) and Confirmation Memo – FormC (Regulation 14.3) duly approved by the Governing Board are enclosed as Annexure – I, II & III respectively. Alsoenclosed are the relevant clauses under the Bye-laws of the Exchange, which are required to be printed on thereverse of both the Contract Note and Confirmation Memo (Annexure IV). The members are requested to arrangeto take immediate steps to get the Contract Notes printed in the revised formats together with the relevant clauseson the reverse and also issue Contract Notes to their constituents in the revised formats with the above amendments.They are also advised to immediately inform their registered sub brokers to issue Confirmation Memo to theirconstituents in Form C with the relevant clauses printed on the reverse.

5. The members are further advised to ensure strict adherence to the revise format of Contract Note and also issueof Confirmation Memo by their sub-brokers to their constituents. The members may please note that non-issuanceof the Contract Note in the prescribed format, may attract a fine of Rs.10,000/- and such other action as may bedecided by the Exchange.

6. In case members require any clarification, they may please contact any of the following officials :

Sr. No. Name Intercom No.

1. Shri C.K. Patil 8465

2. Shri Arun P. Dhanawde 8070

3. Shri Sydney Miranda 8168

S.T. GerelaGen.Manager (Inspection & Surveillance)Encl: Annexure I – IV

58

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Relevant clauses under the Bye-laws of the Exchange, which are required to be printed on the reverse of theContract Note & Confirmation Memo:

Reference to Arbitration

248. (a) All claims ( whether admitted or not ) difference and disputes between a member and a non-member or non-members (the terms ‘non-member’ and ‘non-members’ shall include a remisier, authorised clerk,a sub-broker who is registered with SEBI as affiliated with that member or employee or any other person withwhom the member shares brokerage) arising out of or in relation to dealings, transactions and contracts madesubject to the Rules, Bye-laws and Regulations of the Exchange or with reference to anything incidental thereto orin pursuance thereof or relating to their construction, fulfillment or validity or in relation to the rights, obligationsand liabilities of remisiers, authorised clerks, sub-brokers, constituents, employees or any other persons withwhom the member shares brokerage in relation to such dealings, transactions and contracts shall be referred toand decided by arbitration as provided in the Rules, Bye-laws and Regulations of the Exchange.

Contract Constitutes Arbitration Agreement

(b) An acceptance whether express or implied of a contract subject to arbitration as provided in sub-clause (a)and with this provision for arbitration incorporated therein shall constitute and shall be deemed to constitute anagreement between the member and the non-member or non-members concerned that all claims (whether admittedor not), differences and disputes of the nature referred to in sub-clause (a) in respect of all dealings, transactionsand contracts of a date prior or subsequent to the date of contract shall be submitted to and decided by arbitrationas provided in the Rules, Bye-laws and Regulations of the Exchange and that in respect thereof any questionwhether such dealings, transactions and contracts have been entered into or not shall also be submitted to anddecided by arbitration as provided in the Rules, Bye-laws and Regulations of the Exchange.

(a) If any claim (whether admitted or not), difference or dispute arises between a sub-broker who is registeredwith SEBI as affiliated with a member and his constituent arising out of or in relation to dealings, transactions andcontracts between the constituent and the sub-broker made subject to the Rules, Bye-laws and Regulations of theExchange or with reference to anything incidental thereto or in pursuance thereof or relating to their constructionfulfillment or validity or in relation to the rights, obligations and liabilities of the constituent, the sub-broker or themember in connection therewith, then such claim, difference or dispute shall be brought to the notice of themember by the constituent in writing within six months from the date of the claim, difference or dispute arising andthe same shall as far as possible be settled with the help of the member failing which it shall be brought to thenotice of the Exchange for resolution. If a claim, dispute or difference persists, the same shall be referred to anddecided by arbitration as provided in the Rules, Bye-laws and Regulations.

Appointment of Arbitrators

249. (i) (a) All claims, differences and disputes which are required to be referred to arbitration under these Bye-laws and Regulations shall be referred to arbitration of a sole arbitrator or of three arbitrators to be appointed bythe Executive Director or by the parties from the Panel of Arbitrators constituted by the Governing Board, in themanner provided in these Bye - laws and Regulations. The Executive Director shall appoint a sole arbitrator andpreferably appoint a non-member as sole arbitrator.

(b) In an arbitral tribunal of three arbitrators, each party shall appoint one arbitrator and the third Arbitrator will beappointed by Executive Director. Those proposed arbitrators shall be from the panel of arbitrators constituted bythe Governing Board. If any of the parties fail to appoint arbitrator within 10 days of the day he is asked to appointarbitrator the Executive Director shall appoint such arbitrators in the manner provided in these Bye - laws and therequest of the non - member for appointment of non - member arbitrator from the Panel of arbitrators prepared bythe Governing Board shall be conceded to. All the Bye - laws providing arbitration by a single arbitrator shall applymutatis-mutandis to arbitration by three members.

60

Executive Director - authority to designate

249 A. The Executive Director of The Exchange for the purpose of Arbitration Bye - laws shall also include any officialof the Exchange not below the rank of General Manager designated by the Executive Director from time to time forthe specific function entrusted to him under these Bye - laws.

Appointment of Arbitrator by the Executive Director

250. (1) On payment in advance of the minimum fees of an arbitrator prescribed under these Bye-laws and Regulationsby any party to a claim, difference or dispute, the Executive Director shall appoint an arbitrator ;

(a) if the parties have failed to agree as to the person to be appointed as the arbitrator.

(b) if the arbitrator dies or fails, refuses or neglects to act or becomes incapable of acting as an arbitrator before anaward is made by him.

(2) An arbitrator to be appointed under clause (1) shall be from the panel of arbitrators prepared by the GoverningBoard as per bye-law 262 (b) and shall be a non member in case one of the parties desires the appointment of anon member as arbitrator.

(3) While appointing arbitrator it shall be ensured that the arbitrator is independent and impartial not interested in anyof the parties or the claim dispute or difference referred to in arbitration.

Award Binding on Parties and their Representatives

257. The parties to the reference shall in all things abide by and forthwith carry into effect the award of the arbitratorswhich shall be final and binding on the parties and their respective representatives notwithstanding the death of orlegal disability occurring to any party before or after the making of the award and such death or legal disabilityshall not operate as a revocation of the reference or award.

Enforcement of the Award

259. (i) A party to a reference who is dissatisfied with an award of an arbitrator(s) may appeal to an Appeal

Bench against such award within 15 days of receipt of the award.

(ii) When the time for preferring an appeal has expired and no appeal has been preferred or the appeal has beenpreferred and the award has been passed in the appeal, and when the time for making an application to set asidethe award under Section 34 of the Arbitration and Conciliation Act, 1996 has expired, or such application havingbeen made, it has been refused, the final award shall be enforceable in the same manner as if it were a decree ofthe Court.

Operation of Contracts

274. All dealings, transactions and contracts which are subject to the Rules, Bye-laws and Regulations of the Exchangeand every arbitration agreement to which the Rules, Bye-laws and Regulations of the Exchange apply shall bedeemed in all respects to be subject to the Rules, Bye-laws and Regulations of the Exchange and shall bedeemed to be and shall take effect as wholly made, entered into and to be performed in the city of Bombay and theparties to such dealings, transactions, contracts and agreements shall be deemed to have submitted to thejurisdiction of the Courts in Bombay for the purpose of giving effect to the provisions of the Rules, Bye-laws andRegulations of the Exchange.

Appeal against Arbitral Award

274A.3. A party dissatisfied with an Award may appeal to the Appeal Bench against such Award within 15 days of thereceipt of such award.

61

Notices and Communications How to be Served

275. Notices and communications to a member or a non-member shall be served in any one or more or all of thefollowing ways and any such notice or communication under (i) to (vi) below shall be served at his ordinarybusiness address and/or at his ordinary place of residence and/or at his last known address:

(i) by delivering it by hand;

(ii) by sending it by registered post;

(iii) by sending it under certificate of posting;

(iv) by sending it by express delivery post;

(v) by sending it by telegram;

(vi) by affixing it on the door at the last known business or residential address;

(vii) by its oral communication to the party in the presence of a third person;

(viii) by advertising it at least once in any daily newspaper published in Mumbai;

(ix) by a notice posted on the notice board of the Exchange if no address be known.

62

AP

PE

ND

IX -

B

TO

R

EG

UL

AT

ION

14

Co

ntr

act

No

te

- F

orm

B

(R

egul

atio

n 14

.2)

Con

trac

t N

ote

- F

orm

B (

Reg

ulat

ion

14.2

)S

ub

ject

To

Mu

mb

ai J

uri

sdic

tio

nC

on

trac

t N

ote

iss

ued

by

Mem

ber

s d

ealin

g w

ith

co

nst

itu

ents

as

Pri

nci

pals

Nam

e of

Mem

ber/

Firm

Nam

e(s)

of

Pro

prie

tor/

Par

tner

s (if

any

)To In

com

e Ta

x P

AN

/GIR

No.

Of

Con

stitu

ent:

(

if a

cont

ract

of

a va

lue

exce

edin

g R

s. 1

lakh

)S

ir(s)

,I/W

e ha

ve t

his

day

ente

red

into

the

fol

low

ing

tran

sact

ions

with

you

as

PR

INC

IPA

L(S

) T

O P

RIN

CIP

AL(

S):

“Sec

uri

ties

SO

LD

to

yo

u f

or

Del

iver

y/C

lear

ing

” “

Sec

uri

ties

BO

UG

HT

FR

OM

yo

u f

or

Del

iver

y/C

lear

ing

”

Qu

anti

tyK

ind

of

Sec

uri

tyR

ate

Qu

anti

tyK

ind

of

Sec

uri

tyR

ate

1.T

his

Con

trac

t is

mad

e su

bjec

t to

the

Rul

es,

Bye

-law

s an

d R

egul

atio

ns a

nd u

sage

s of

The

Sto

ck E

xcha

nge,

Mum

bai.

2.T

his

cont

ract

is s

ubje

ct t

o th

e ju

risdi

ctio

n of

the

Cou

rts

in M

umba

i.3.

In t

he e

vent

of

any

clai

m (

whe

ther

adm

itted

or

not)

diff

eren

ce o

r di

sput

e ar

isin

g be

twee

n yo

u an

d m

e/us

out

of

thes

e tr

ansa

ctio

ns t

he m

atte

r sh

all b

e re

ferr

ed t

oar

bitr

atio

n in

Mum

bai a

s pr

ovid

ed in

the

Rul

es,

Bye

-law

s an

d R

egul

atio

ns o

f T

he S

tock

Exc

hang

e, M

umba

i.4.

Thi

s co

ntra

ct c

onst

itute

s an

d sh

all b

e de

emed

to

cons

titut

e as

pro

vide

d ov

erle

af a

n ag

reem

ent

betw

een

you

and

me/

us t

hat

all c

laim

s (w

heth

er a

dmitt

ed o

r no

t),

diffe

renc

es a

nd d

ispu

tes

in r

espe

ct o

f an

y de

alin

gs,

tran

sact

ions

and

con

trac

ts o

f a

date

prio

r or

sub

sequ

ent

to t

he d

ate

of t

his

cont

ract

(in

clud

ing

any

ques

tion

whe

ther

such

dea

lings

, tr

ansa

ctio

ns o

r co

ntra

cts

have

bee

n en

tere

d in

to o

r no

t) s

hall

be s

ubm

itted

to

and

deci

ded

by a

rbitr

atio

n in

Mum

bai a

s pr

ovid

ed in

the

Rul

es,

Bye

-law

san

d R

egul

atio

ns o

f T

he S

tock

Exc

hang

e, M

umba

i.5.

The

pro

visi

ons

prin

ted

over

leaf

for

m a

par

t of

the

con

trac

t.Yo

urs

faith

fully

,M

umba

i,D

ated

:M

embe

r(s)

of

the

Sto

ck E

xcha

nge,

Mum

bai

Inco

me

Tax

PA

N/

GIR

No.

of

Mem

ber:

(if a

con

trac

t of

a v

alue

exc

eedi

ng R

s. 1

lakh

)

Sta

mp

a

s

requ

ired

un

der

Art

icle

5(

b) o

r 5

(c)

ofS

ched

ule

I

to

th

e

Bom

bay

Sta

mp

Act

, 19

58 w

here

nec

essa

ry

Fo

rm B

N

o.

63

1.T

his

Con

firm

atio

n M

emo

is s

ubje

ct t

o th

e R

ules

, B

ye-la

ws

and

Reg

ulat

ions

and

usa

ge o

f T

he S

tock

Exc

hang

e, M

umba

i.2.

Bro

kera

ge h

as b

een

char

ged

as s

tate

d ab

ove

at r

ates

not

exc

eedi

ng t

he o

ffici

al s

cale

of

brok

erag

e an

d in

dica

ted

sepa

rate

ly.

3.T

his

cont

ract

is s

ubje

ct t

o th

e ju

risdi

ctio

n of

the

Cou

rts

in M

umba

i.4.

In th

e ev

ent o

f any

cla

im (

whe

ther

adm

itted

or

not)

diff

eren

ce o

r di

sput

e ar

isin

g be

twee

n yo

u an

d m

e/us

out

of t

hese

tran

sact

ions

, the

mat

ter

shal

l be

brou

ght t

o th

e no

tice

of th

e M

embe

r w

ithin

6 m

onth

s fr

om th

e da

te o

f dis

pute

and

sam

e sh

all a

s fa

r as

pos

sibl

e be

set

tled

with

the

help

of m

embe

r br

oker

faili

ng w

hich

it s

hall

be b

roug

ht to

the

notic

e of

the

Exc

hang

e of

ficia

ls fo

r re

solu

tion.

If th

e di

sput

e pe

rsis

ts, t

he s

ame

shal

l be

refe

rred

to a

rbitr

atio

n in

Mum

bai a

s pr

ovid

ed in

the

Rul

es, B

ye-la

ws

and

Reg

ulat

ions

of T

he S

tock

Exc

hang

e, M

umba

i.5.

Thi

s co

nfirm

atio

n M

emo

cons

titut

es a

nd s

hall

be d

eem

ed to

con

stitu

te a

s pr

ovid

ed o

verle

af a

n ag

reem

ent b

etw

een

you

and

me/

us th

at a

ll cl

aim

s (w

heth

er a

dmitt

ed o

r no

t),

diffe

renc

es a

nd d

ispu

tes

in r

espe

ct o

f an

y de

alin

gs,

tran

sact

ions

and

con

trac

ts o

f a

date

prio

r or

sub

sequ

ent

to t

he d

ate

of t

his

cont

ract

(in

clud

ing

any

ques

tion

whe

ther

such

dea

lings

, tra

nsac

tions

or

cont

ract

s ha

ve b

een

ente

red

into

or

not)

sha

ll be

sub

mitt

ed to

and

dec

ided

by

arbi

trat

ion

in M

umba

i as

prov

ided

in th

e R

ules

, Bye

-law

s an

dR

egul

atio

ns o

f T

he S

tock

Exc

hang

e, M

umba

i.6.

The

pro

visi

ons

prin

ted

over

leaf

for

m a

par

t of

the

Con

firm

atio

n M

emo.

You

rs f

aith

fully

,

Pla

ce:

Dat

e:S

ub-b

roke

r Ta

x P

AN

/GIR

No.

of

Sub

-bro

ker

:(if

a c

ontr

act

of a

val

ue e

xcee

ding

Rs.

1 la

kh)

AP

PE

ND

IX -

B

TO

R

EG

UL

AT

ION

14

Co

nfi

rmat

ion

Mem

o

- F

orm

- C

(

Reg

ulat

ion

14.3

)C

on

firm

atio

n M

emo

iss

ued

by

Su

b-b

roke

rs a

ctin

g f

or

clie

nts

/co

nst

itu

ents

as

Su

b-b

roke

rsS

UB

JEC

T T

O E

XC

LU

SIV

E J

UR

ISD

ICT

ION

OF

TH

E C

OU

RT

S A

T M

UM

BA

I

NA

ME

OF

TH

E S

UB

-BR

OK

ER

SE

BI

RE

GN

. N

o.

NA

ME

OF

TH

E A

FF

ILIA

TIN

G

ME

MB

ER

:

(Sto

ck-b

roke

r o

f T

he

Sto

ck E

xch

ang

e, M

um

bai

)

Mem

ber

Cle

arin

g N

o.

:S

EB

I R

egn

. N

o.:

Ad

dre

ss:

Ref

. N

o.

of

con

solid

ated

Co

ntr

act

No

te o

f M

emb

er:

To Nam

e of

the

Clie

nt/C

onst

ituen

t or

Cod

e N

o:O

rder

No.

:In

com

e Ta

x P

AN

/GIR

No.

of C

lient

:

(if

a co

ntra

ct o

f a v

alue

exc

eedi

ng R

s.1

lakh

)S

ir(s)

,I/W

e ha

ve d

one

toda

y th

e fo

llow

ing

tran

sact

ions

on

your

acc

ount

and

aga

inst

you

r or

der:

Ord

erTr

ade

Tra

deN

o.*

No.

*T

ime*

“ Sec

uriti

es B

OU

GH

T f

or

you

for

“ Sec

uriti

es S

OLD

for

yo

u fo

r

D

eliv

ery/

Cle

arin

g”D

eliv

ery/

Cle

arin

g”

Qty

.N

ame

Pur

chas

eB

roke

rage

Bro

kera

geR

ate

Plu

sof

Rat

efo

rfo

rth

eB

roke

rage

Sec

urity

afili

ated

Sub

-bro

ker

mem

ber

* as

per

the

Con

trac

t Not

e is

sued

by

the

Mem

ber

Fo

rm -

C

No

.

Qty

.N

ame

Pur

chas

eB

roke

rage

Bro

kera

geR

ate

Plu

sof

Rat

efo

rfo

rth

eB

roke

rage

Sec

urity

afili

ated

Sub

-bro

ker

mem

ber

64

Notice no. : 20021109-9

Notice date : Saturday, November 09, 2002

Subject : ISSUANCE OF CONTRACT NOTE CUM BILL

Segment Name : Equity

Contents :

Sub: Issuance of Contract Note cum Bill

All the members of the Exchange are required to issue contract notes to their constituents within 24 hours of theexecution of the contract in the formats prescribed in Appendix B to Regulation 14 of the Rules, Bye-laws andRegulations of the Exchange. The Contract notes issued by the members to their constituents when acting for themas agents are required to be in Form A, and in Form B when dealing with them as principals.

The Exchange had received representations from many members stating that with the introduction of Rolling Settlements,issue of separate bills to their clients had become cumbersome. They requested the Exchange to permit them toinclude the particulars normally provided in the bills, in the contract notes issued by them to their clients, so that theyneed not issue separate bills to their clients.

The Governing Board in its meeting held on October 24, 2002 considered the matter and approved alternate formatsof contract notes, which could be used by the members as contract note cum bill. The suggested alternate formats ofthe contract notes, Form AA (alternate for existing Form A) and Form BB (alternate for existing Form B) are enclosedas Annexure I & II respectively.

Members may however note that the formats of Form AA and Form BB are merely recommendatory in nature andmembers are at liberty to include any other additional matter or information therein as they may desire, without diluting/altering the basic Form A and Form B of the contract note stipulated in Appendix –B to Regulation 14.2. There are nochanges in the clauses printed on the reverse of the contract notes and, for the benefit of the members, the same areenclosed as Annexure-III,

The Governing Board further, decided to add Regulation 14.2.1 to the Rules, Bye-laws and Regulations of the Exchange,which reads as under:

14.2.1 “ Members shall, while issuing contract notes in accordance with Regulation 14.2 to their constituentswhen acting for them as agents and when dealing with them as principals, be entitled to and may addsuch relevant details as they so deem fit to make it a contract note cum bill. Provided, however, that thecontent of the contract note as so prescribed by the Governing Board from time to time shall not bediluted.

In case members require any further clarifications, they may contact the concerned Account Managers of the MembershipServices Department.

Sunil Vichare

General Manager - Membership Services

65

NE

T A

MO

UN

T D

UE

FR

OM

YO

U/T

O U

S :

1.T

his

Con

trac

t is

mad

e su

bjec

t to

the

Rul

es,

Bye

-law

s an

d R

egul

atio

ns a

nd u

sage

s of

The

Sto

ck E

xcha

nge,

Mum

bai.

2.B

roke

rage

has

bee

n ch

arge

d as

sta

ted

abov

e at

rat

es n

ot e

xcee

ding

the

offi

cial

sca

le o

f br

oker

age.

3.T

his

cont

ract

is s

ubje

ct t

o th

e ju

risdi

ctio

n of

the

Cou

rts

in M

umba

i.4.

In th

e ev

ent o

f any

cla

im (

whe

ther

adm

itted

or

not)

diff

eren

ce o

r di

sput

e ar

isin

g be

twee

n yo

u an

d m

e/us

out

of t

hese

tran

sact

ions

the

mat

ter

shal

l be

refe

rred

to a

rbitr

atio

nin

Mum

bai a

s pr

ovid

ed in

the

Rul

es,

Bye

-law

s an

d R

egul

atio

ns o

f T

he S

tock

Exc

hang

e, M

umba

i.5.

Thi

s co

ntra

ct c

onst

itute

s an

d sh

all

be d

eem

ed t

o co

nstit

ute

as p

rovi

ded

over

leaf

an

agre

emen

t be

twee

n yo

u an

d m

e/us

tha

t al

l cl

aim

s (w

heth

er a

dmitt

ed o

r no

t),

diffe

renc

es a

nd d

ispu

tes

in r

espe

ct o

f an

y de

alin

gs,

tran

sact

ions

and

con

trac

ts o

f a

date

prio

r or

sub

sequ

ent

to t

he d

ate

of t

his

cont

ract

(in

clud

ing

any

ques

tion

whe

ther

such

dea

lings

, tra

nsac

tions

or

cont

ract

s ha

ve b

een

ente

red

into

or

not)

sha

ll be

sub

mitt

ed to

and

dec

ided

by

arbi

trat

ion

in M

umba

i as

prov

ided

in th

e R

ules

, Bye

-law

s an

dR

egul

atio

ns o

f T

he S

tock

Exc

hang

e, M

umba

i.6.

The

pro

visi

ons

prin

ted

over

leaf

for

m a

par

t of

the

con

trac

t.Yo

urs

faith

fully

,M

umba

i,D

ated

:M

embe

r(s)

of

the

Sto

ck E

xcha

nge,

Mum

bai

Inco

meT

ax P

AN

/GIR

No.

of

Mem

ber:

(if

a co

ntra

ct o

f a

valu

e ex

ceed

ing

Rs.

1 la

kh)

AP

PE

ND

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67

Reference to Arbitration

248. (a) All claims (whether admitted or not) difference and disputes between a member and a non-member or non-members (the terms ‘non-member’ and ‘non-members’ shall include a remisier, authorised clerk, a sub-brokerwho is registered with SEBI as affiliated with that member or employee or any other person with whom themember shares brokerage) arising out of or in relation to dealings, transactions and contracts made subject to theRules, Bye-laws and Regulations of the Exchange or with reference to anything incidental thereto or in pursuancethereof or relating to their construction, fulfillment or validity or in relation to the rights, obligations and liabilities ofremisiers, authorised clerks, sub-brokers, constituents, employees or any other persons with whom the membershares brokerage in relation to such dealings, transactions and contracts shall be referred to and decided byarbitration as provided in the Rules, Bye-laws and Regulations of the Exchange.

Contract Constitutes Arbitration Agreement

(b)An acceptance whether express or implied of a contract subject to arbitration as provided in sub-clause (a) andwith this provision for arbitration incorporated therein shall constitute and shall be deemed to constitute an agreementbetween the member and the non-member or non-members concerned that all claims (whether admitted or not),differences and disputes of the nature referred to in sub-clause (a) in respect of all dealings, transactions andcontracts of a date prior or subsequent to the date of contract shall be submitted to and decided by arbitration asprovided in the Rules, Bye-laws and Regulations of the Exchange and that in respect thereof any question whethersuch dealings, transactions and contracts have been entered into or not shall also be submitted to and decided byarbitration as provided in the Rules, Bye-laws and Regulations of the Exchange.

(c) If any claim (whether admitted or not), difference or dispute arises between a sub-broker who is registered withSEBI as affiliated with a member and his constituent arising out of or in relation to dealings, transactions andcontracts between the constituent and the sub-broker made subject to the Rules, Bye-laws and Regulations of theExchange or with reference to anything incidental thereto or in pursuance thereof or relating to their constructionfulfillment or validity or in relation to the rights, obligations and liabilities of the constituent, the sub-broker or themember in connection therewith, then such claim, difference or dispute shall be brought to the notice of themember by the constituent in writing within six months from the date of the claim, difference or dispute arising andthe same shall as far as possible be settled with the help of the member failing which it shall be brought to thenotice of the Exchange for resolution If a claim, dispute or difference persists, the same shall be referred to anddecided by arbitration as provided in the Rules, Bye-laws and Regulations.

Appointment of Arbitrators

249.(i)(a)All claims, differences and disputes which are required to be referred to arbitration under these Bye-laws andRegulations shall be referred to arbitration of a sole arbitrator or of three arbitrators to be appointed by the ExecutiveDirector or by the parties from the Panel of Arbitrators constituted by the Governing Board, in the manner providedin these Bye - laws and Regulations. The Executive Director shall appoint a sole arbitrator and preferably appointa non-member as sole arbitrator.

(b)In an arbitral tribunal of three arbitrators, each party shall appoint one arbitrator and the third Arbitrator will beappointed by Executive Director. Those proposed arbitrators shall be from the panel of arbitrators constituted bythe Governing Board. If any of the parties fail to appoint arbitrator within 10 days of the day he is asked to appointarbitrator the Executive Director shall appoint such arbitrators in the manner provided in these Bye - laws and therequest of the non - member for appointment of non - member arbitrator from the Panel of arbitrators prepared bythe Governing Board shall be conceded to. All the Bye - laws providing arbitration by a single arbitrator shall applymutatis-mutandis to arbitration by three members.

68

Executive Director - authority to designate

249 A.The Executive Director of The Exchange for the purpose of Arbitration Bye - laws shall also include any official ofthe Exchange not below the rank of General Manager designated by the Executive Director from time to time forthe specific function entrusted to him under these Bye - laws.

Appointment of Arbitrator by the Executive Director

250. (1) On payment in advance of the minimum fees of an arbitrator prescribed under these Bye-laws andRegulations by any party to a claim, difference or dispute, the Executive Director shall appoint an arbitrator;

(a) if the parties have failed to agree as to the person to be appointed as the arbitrator.

(b) if the arbitrator dies or fails, refuses or neglects to act or becomes incapable of acting as an arbitratorbefore an award is made by him.

(2) An arbitrator to be appointed under clause (1) shall be from the panel of arbitrators prepared by the GoverningBoard as per bye-law 262 (b) and shall be a non member in case one of the parties desires the appointmentof a non member as arbitrator.

(3) While appointing arbitrator it shall be ensured that the arbitrator is independent and impartial not interestedin any of the parties or the claim dispute or difference referred to inarbitration.

Award Binding on Parties and their Representatives

257. The parties to the reference shall in all things abide by and forthwith carry into effect the award of the arbitratorswhich shall be final and binding on the parties and their respective representatives notwithstanding the death of orlegal disability occurring to any party before or after the making of the award and such death or legal disabilityshall not operate as a revocation of the reference or award.

Enforcement of the Award

259. (i) A party to a reference who is dis-satisfied with an award of an arbitrator(s) may appeal to an Appeal Benchagainst such award within 15 days of receipt of the award.

(ii) When the time for preferring an appeal has expired and no appeal has been preferred or the appeal hasbeen preferred and the award has been passed in the appeal, and when the time for making an applicationto set aside the award under Section 34 of the Arbitration and Conciliation Act, 1996 has expired, or suchapplication having been made, it has been refused, the final award shall be enforceable in the same manneras if it were a decree of the Court.

Operation of Contracts

274. All dealings, transactions and contracts which are subject to the Rules, Bye-laws and Regulations of the Exchangeand every arbitration agreement to which the Rules, Bye-laws and Regulations of the Exchange apply shall bedeemed in all respects to be subject to the Rules, Bye-laws and Regulations of the Exchange and shall bedeemed to be and shall take effect as wholly made, entered into and to be performed in the city of Bombay and theparties to such dealings, transactions, contracts and agreements shall be deemed to have submitted to thejurisdiction of the Courts in Bombay for the purpose of giving effect to the provisions of the Rules, Bye-laws andRegulations of the Exchange.

Appeal against Arbitral Award

274A.3. A party dissatisfied with an Award may appeal to the Appeal Bench against such Award within 15 days of thereceipt of such award.

69

Notices and Communications how to be served

275. Notices and communications to a member or a non-member shall be served in any one or more or all of thefollowing ways and any such notice or communication under (i) to (vi) below shall be served at his ordinarybusiness address and/or at his ordinary place of residence and/or at his last known address:

(i) by delivering it by hand;

(ii) by sending it by registered post;

(iii) by sending it under certificate of posting;

(iv) by sending it by express delivery post;

(v) by sending it by telegram;

(vi) by affixing it on the door at the last known business or residential address;

(vii) by its oral communication to the party in the presence of a third person;

(viii) by advertising it at least once in any daily newspaper published in Mumbai;

(ix) by a notice posted on the notice board of the Exchange if no address be known.

70

Notice No. : 20060627-18Notice date : Tuesday, June 27, 2006Subject : Amendment to Regulation 14 & Format of Contract Notes.Segment Name : General

CONTENTS :

Attention of Trading Members is invited to the following revision carried out in the formats of contract Notes, as approvedby the Governing Board at it's meeting, held on June 3,2006.

Format Particulars

Form A Format of Contract Notes Issued by Members acting as Agents on Behalf of the Clients (Annexure - I)

Form B Format of Contract Notes Issued by Members acting as Principals (Annexure - II)

Form AA Alternative Format to Form A (Annexure - III)

Arbitration Clauses to be printed on the reverse of the Contract notes are enclosed as Annexure - IV.

The revised format of Contract Notes inter-alia makes it mandatory for the trading members to print order time in thecontract notes (Form A/ Form AA). It is clarified that order time to be printed on the contract note shall be the original /modified order placement time as the case may be for the trades executed.

Trading Members may kindly note that Form AA is recommendatory in nature and the members may include any otheradditional matter or information, as they may desire. Further, the columns for Securities Transaction Tax (STT) andService Tax (ST) are optional. However, trading members shall continue to give total STT and ST amount on the contractnote and statement of STT as per annexure prescribed vide the Exchange's Notice No. 20040927-13 dated Sept27,2004.

In addition to the above the Board of Directors had deleted Regulation 14.3 to the Rules, Bye-laws and Regulations ofthe Exchange and Form C prescribed in Appendix B to Regulation 14.

The Trading Members are advised to ensure compliance with the requirement of revised format of Contract Noteslatest by August 1, 2006.

In case trading members require any further clarifications, they may contact any of the following officials: -

Name of the Official Extension No.

Mr. Yogesh Bambardekar 8286

Mr. Nitesh Agarwal 8354

Mr. Mukesh Kuwad 8497

Ms. Parul Kothari 8196

P. K. Ramesh Pankaj GuptaDy. General Manager Asst. General ManagerSurveillance & Supervision Surveillance & Supervision

71

Notice no : 20060630-2Notice date : Friday, June 30, 2006Subject : Revised Format of Contract NotesSegment Name : General

CONTENTS :

TO ALL TRADING MEMBERS,

Attention of the Trading Members is drawn to Exchange notice no. 20060627 - 18 dated June 27,2006 regarding revisedFormat of Contract Notes. The exchange is receiving large number of queries regarding merging of common fields inthe Contract Notes.

In this regard it is clarified that Form AA is recommendatory in nature and the Trading Member may include any otheradditional matter or information, as they may desire. They may also merge the common columns for both buy and selltransactions, clearly identifying a transaction as buy/sell. Accordingly after merging, the columns may be printedsequentially as follow: (i) Order No. (ii) Order Time (iii) Trade No. (iv) Trade Time (v) Security (vi) Buy/Sell (vii) Quantity(viii) Gross Rate Per Security (viii) Total (ix) Brokerage (x) Service Tax (optional)(xi) Security Transaction Tax (Optional).

In case trading members require any further clarifications, they may contact any of the following officials: -

Name of the Official Extension No.

Ms. Parul Kothari 8196

Mr. Nitesh Agarwal 8354

Mr. Ashwin Dattani 8157

P. K. Ramesh Pankaj GuptaDy. General Manager Asst. General ManagerSurveillance & Supervision Surveillance & Supervision

72

Notice no : 20050909-13Notice date : Friday, September 09, 2005Subject : Electronic issuance of contract notes-Additional conditions.Segment Name : General

Trading Members of the Exchange are hereby informed that SEBI has issued circular No. MRD/DoP/SE/Cir-20/2005dated September 8, 2005 regarding the additional conditions to be complied for issuing Electronic Contract Notes.

A copy of the above-mentioned SEBI circular, which is self-explanatory, is enclosed herewith for your ready reference.The SEBI circular is also available on the SEBI website http://www.sebi.gov.in/ .

Members are required to comply with the provisions of the above-mentioned SEBI circular.

P.K.Ramesh Sandeep GuptaDy. General Manager Deputy ManagerSurveillance and Supervision Surveillance & Supervision

73

General ManagerMarket Regulation Department – PolicyEmail:-sundaresanvs@sebi.gov.inMRD/DoP/SE/Cir-20/2005September 8, 2005

The Executive Directors/Managing Directors/Administrators

Of All Stock Exchanges

Dear Sir / Madam,

Sub: Electronic issuance of contract notes – Additional conditions

1. Please refer to SEBI circulars No. SEBI/SMD/SE/15/2003/29/04 dated April 29, 2003 and SMDRP/Policy/Cir-56/2000 dated December 15, 2000 on the captioned subject.

2. It is hereby specified that in addition to the conditions specified in the aforesaid circulars and the provisions of theInformation Technology Act, 2000 (IT Act, 2000), all the members of stock exchanges who are desirous of issuingElectronic Contract Notes (ECNs) to their clients shall comply with the following conditions :-

2.1 Issuing ECNs when specifically consented

The digitally signed ECNs may be sent only to those clients who have opted to receive the contract notes inan electronic form, either in the Member – Client agreement / Tripartite agreement or by a separate letter.The mode of confirmation shall be as per the agreement entered into with the clients.

2.2 Where to send ECNs

The usual mode of delivery of ECNs to the clients shall be through e-mail. For this purpose, the client shallprovide an appropriate e-mail account to the member which shall be made available at all times for suchreceipts of ECNs.

2.3 Requirement of digital signature

All ECNs sent through the e-mail shall be digitally signed, encrypted, non-tamperable and shall comply withthe provisions of the IT Act, 2000. In case the ECN is sent through e-mail as an attachment, the attached fileshall also be secured with the digital signature, encrypted and non-tamperable.

2.4 Requirements for acknowledgement, proof of delivery, log report etc.

2.4.1 AcknowledgementThe acknowledgement of the e-mail shall be retained by the member in a soft and non-tamperable form.

2.4.2 Proof of delivery

i. The proof of delivery i.e., log report generated by the system at the time of sending the contractnotes shall be maintained by the member for the specified period under the extant regulationsof SEBI/stock exchanges and shall be made available during inspection, audit, etc.

ii. The member shall clearly communicate to the client in the agreement executed with the clientfor this purpose that non-receipt of bounced mail notification by the member shall amount todelivery of the contract note at the e-mail ID of the client.

2.4.3 Log Report for rejected or bounced mails

i. The log report shall also provide the details of the contract notes that are not delivered to theclient/e-mails rejected or bounced back.

74

ii. Also, the member shall take all possible steps (including settings of mail servers, etc) to ensurereceipt of notification of bounced mails by the member at all times within the stipulated timeperiod under the extant regulations of SEBI/stock exchanges.

2.5 When to issue or send in Physical mode

2.5.1 Issue in Physical mode

In the case of those clients who do not opt to receive the contract notes in the electronic form, themember shall continue to send contract notes in the physical mode to such clients.

2.5.2 Send in Physical mode

Wherever the ECNs have not been delivered to the client or has been rejected (bouncing of mails) bythe e-mail ID of the client, the member shall send a physical contract note to the client within thestipulated time under the extant regulations of SEBI/stock exchanges and maintain the proof of deliveryof such physical contract notes.

2.6 General requirements

2.6.1 ECNs through websiteIn addition to the e-mail communication of the ECNs in the manner stated above, in order to furtherstrengthen the electronic communication channel, the member shall simultaneously publish the ECNon his designated web-site in a secured way and enable relevant access to the clients.

2.6.2 Access to the website

In order to enable clients to access the ECNs posted in the designated website in a secured way, themember shall allot a unique user name and password for the purpose, with an option to the client toaccess the same and save the contract note electronically or take a print out of the same.

2.6.3 Preservation/Archive of electronic documents

The member shall retain/archive such electronic documents as per the extant rules/regulations/circulars/guidelines issued by SEBI/Stock Exchanges from time to time.

3. The Stock Exchanges are advised to

3.1 make necessary amendments to the relevant bye-laws, rules and regulations for the implementation ofthe above decision immediately.

3.2 bring the provisions of this circular to the notice of the member brokers/clearing members of the Exchangeand also to disseminate the same on the website.

3.3 communicate to SEBI, the status of the implementation of the provisions of this circular in Section II, itemno. 13 of the Monthly Development Report.

4. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and ExchangeBoard of India Act, 1992, to protect the interests of investors in securities and to promote the development of, andto regulate the securities market.

Yours faithfully,

V S SUNDARESAN

75

Notice no : 4914/96Notice date : August 13, 1996

NOTICE

The Securities and Exchange Board of India has brought to our notice, certain common irregularities/deficienciesobserved while inspecting the books of accounts of the members. For the benefit of the members, the irregularities/deficiencies observed by SEBI are listed below. This is not an exhaustive list of irregularities/violations. However, itmay help the members in avoiding occurrence of such instances:

1. Relating to Contract Notes:

a. Not having pre-printed serial numbers

b. Not issuing contracts in Form ‘B’ while acting as principal

c. Not affixing Brokers’ note stamps

d. Not having SEBI registration number.

e. Signed by unauthorized persons or not signed.

f. Not maintaining copies of contract notes.

g. Maintaining counterfoil of contract notes without adequate details.

h. Despatching contractnotes after 24 hours.

2. Not obtaining client’s consent while acting as principal.

3. Dealing with unregistered sub-brokers.

4. a. Not having separate bank account for clients’ funds.

b. Having separate bank account for clients’ funds but not segregating clients’ funds from his own funds.

5. Non maintenance or improper maintenance of books of accounts which are required to be maintained as perRule 15 of the Securities Contracts (Regulations) Rules, 1957 and Regulation 17 of SEBI (Stock Brokers andSub-Brokers) Rules, 1992:

a. Hard copy of client account not available.

b. Books are available but the details of which are inadequate to correlate or trace the transactions.

6. Non payment of Registration Fee or making part payment of fee.

7. Not reporting off-the-floor transactions (e.g.)

a. The transactions with members of other exchanges.

b. Principal-to-Principal transactions with clients.

c. Transactions done after the trading hours.

8. Belated payments & deliveries and delayed rectification of Bad Deliveries.

9. Violation of trading restrictions imposed by the Stock Exchange.

Members are advised that a serious view will be taken if such deficiencies are observed during the course ofthe inspections of their books of accounts by the Exchange/SEBI.

R. Vaidyanath

Dy.General ManagerInspection Dept.

76

Notice no : 5419/96Notice date : September 14, 1996

NOTICE

1. Please refer to Exchange Notice No.4914/96 dated August 13, 1996 wherein cetain common irregularities /deficiencies observed by SEBI while inspecting the books of accounts of the members of the Exchanges werebrought to the notie of the members for their guidance and compliance.

2. One of the irregularities pointed out therein was that the Contract notes issued by the members do not have pre-printed serial numbers.

3. In this connection, a large number of members has represented to the Exchange that they print Contract Notes ona continuous stationery. Besides , the Contract Notes issued by them to the Institutions and other constituentsbear different running numbers and fresh set of computer generated running numbers are given to the ContractNotes on a daily basis. Consequently, it would be difficult for them to use Contract Notes with pre-printed serialnumbers.

4. The matter was considered by the Governing Board of the Exchange at its meeting held on September 2, 1996and it was decided that the Contract Notes issued by members should contain all the details as mentioned in theForm ‘A’ / Form ‘B’ prescribed under Appendix ‘3’ to Regulation 14 of the Rules, Bye-laws and Regulations of theExchange, but in view of the position stated in paragraph 3 above, it is not necessary for the members to have pre-printed serial numbers on the Contract Notes. It should, however, be ensured that the Contract Notes bearcomputerized / manual running serial numbers.

5. It may also be noted that if a back dated Contract Note is issued for a transaction which was not reported to theExchange on the relevant day, it may invite penal action against the member.

6. In case, members require any further clarification in this regard, they may please contact any of the followingpersons :-

Sr.No. Name Intercom No.

1. Shri R. Vaidyanath 8069

2. Shri Arun P. Dhanawde 8070

3. Shri Sydney Miranda 8165

S.T. GerelaGeneral Manager (Inspection)

77

Notice no : 1024/98Notice date : March 20, 1998

NOTICE

1. The members are aware that in terms of Bye-law 223 of the Rules, Bye-laws and Regulations of the Exchange,the Contract Notes are required to be signed by the member or by his partner or constituted attorney. Further interms of Rule-213 of the Rules, Bye-laws and Regulations of the Exchange any power of attorney granted bymembers and any substitution thereunder must be registered and a copy thereof is required to be filed with theExchange. However, in case of corporate membership, the company has to pass a Board Resolution authorizingcertain officials to sign the Contract Notes and a certified copy thereof is required to be filed with the Exchange.

2. Several individual members as well as partnership firms of the Exchange have since corporatised their memberships.Such corporate members are advised to pass a necessary Board Resolution authorizing certain officials includingdirectors to sign the Contract Notes and file a certified copy of the same with the Legal & Membership Departmentof the Exchange on the 25th floor at the earliest, if this has not been done earlier. A copy of the same is alsorequired to be provided to the Inspection Department by the members as and when called for.

3. In case members require any clarification, they may please contact any of the following person :

Sr.No. Name Intercom No.

1. Smt. Smita P. Dave 8073

2. Smt. Meera V. Kittur 8168

S.T. GerelaGeneral Manager (Inspection & Surveillance)

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REGULATION OF TRANSACTIONS BETWEENCLIENTS AND BROKERS

Bye-Law

247A. Notwithstanding anything to the contrary contained in these Bye-laws, the following shall regulate the transactionsbetween Clients and Brokers :

(1) It shall be compulsory for all Member brokers to keep the money of the clients in a separate account and theirown money in a separate account. No payment for transactions in which the Member broker is taking a position as aprincipal will be allowed to be made from the client’s account. The above principles and the circumstances under whichtransfer from client’s account to Member broker’s account would be allowed are enumerated below.

A) Member Broker to keep Accounts.

Every member broker shall keep such books of accounts, as will be necessary, to show and distinguish in connectionwithhis business as a member -

(i) Moneys received from or on account of and moneys paid to or on account of each of his clients and,]

(ii) the moneys received and the moneys paid on Member’s own account.

B) Obligation to pay money into “clients accounts”

Every member broker who holds or receives money on account of a client shall forthwith pay such money tocurrent or deposit account at bank to be kept in the name of the member in the title of which the word “clients”shall appear (hereinafter referred to as “clients account”. Member broker may keep one consolidated clientsaccounts for all the clients or accounts in the name of each client, as he thinks fit; provided that when a Memberbroker receives a cheque or draft representing in part money belonging to the client and in part money due to theMember, he shall pay the whole of such cheque or draft into the clients account and effect subsequent transfer aslaid down in para D (ii).

C) What moneys to be paid into “clients account”

No money shall be paid into clients account other than-

i) money held or received on account of clients;

ii) such money belonging to the member as may be necessary for the purpose of opening or maintaining theaccount;

iii) money for replacement of any sum which may by mistake or accident have been drawn from the account incontravention of para D given below;

iv) a cheque or draft received by the Member representing in part money belonging to the client and in partmoney due to the Member.

D) What moneys to be withdrawn from “clients account”

No money shall be drawn from clients account other than

i) money properly required for payment to or on behalf of clients or for or towards payment of a debt due tothe member from clients or money drawn on client’s authority, or money in respect of which there is aliabilityof clients to the Member, provided that money so drawn shall not in any case exceed the total of the moneyso held for the time being for such each client’,

ii) such money belonging to the Member as may have been paid into the client account under para 1C(ii) or1C(iv) given above;

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iii) money which may by mistake or accident have been paid into such account in contravention of para Cabove.

E) (1) Right to lien, set-off etc., not affected

Nothing in this para 1 shall deprive a Member broker of any recourse of right, whether by way of lien, set-off,counter-claim charge or otherwise against moneys standing to the credit of clients account.

(2) It shall be compulsory for all Member brokers to keep separate accounts for client’s securities and to keepsuch books of accounts as may be necessary, to distinguish such securities from his/their own securities.Such accounts for client’s securities shall, inter-alia, provide for the following :-

(a) Securities received for sale or kept pending delivery in the market;

(b) Securities fully paid for, pending delivery to client;

(c) Securities received for transfer or sent for transfer by the Members, in the name of client or hisnominee(s);

(d) Securities that are fully paid for and are held in custody by the Member as security/margin etc. Properauthorization from client for the same shall be obtained by Member;

(e) Fully paid for client’s securities registered in the name of Member, if any, towards margin requirementsetc.;

(f) Securities given on Vyaj-badla. Members shall obtain authorization from clients for the same.

(3) Member Brokers shall make payment to their clients or deliver the securities purchased within two workingdays of pay-out unless the client has requested otherwise. Stock Exchange shall issue a Press Releaseimmediately after the pay-out.

(4) Member brokers shall issue the contract note for purchase/sale of securities to a client within 24 hours ofthe execution of the contract.

(5) In case of purchases on behalf of client, Member brokers shall be at a liberty to close out the transactionsby selling the securities, in case the clients fails to make the full payment to the Member Broker for theexecution of the contract within two days of contract note having been delivered for cash shares and sevendays for specified shares or before pay-in day (as fixed by Stock Exchange for the concerned settlementperiod), whichever is earlier; unless the client already has an equivalent

credit with the Member. The loss incurred in this regard, if any, will be met from the margin money of thatclient.

(6) In case of sales on behalf of clients, Member brokers shall be at liberty to close out the contract by effectingpurchases if the client fails to deliver the securities sold with valid transfer documents within 48 hours of thecontract note having been delivered or before delivery day (as fixed by Stock Exchange authorities for theconcerned settlement period), whichever is earlier. Loss on the transaction, if any, will be deductible fromthe margin money of that client.”

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Notice No. : 4850/97Notice date : December 10, 1997

NOTICE

Re : Bye-law 247A of the Rules, Bye-laws and Regulations of the Exchange.

1. The salient features of Bye-law 247A relating to regulation of transactions between clients and members wereexplained to the members vide Exchange Notice No.7031/94 dated December 6, 1994.

2. The members were further advised vide Notice No.7112/94 dated December 1, 1994 to submit a compliancereport to the Exchange indicating they have opened separate bank account for clients’ monies and a separateaccount in their books for receipt and delivery of securities from/to clients.

3. In this connection, it is observed that during the inspection of books of the members, that some of the membershave failed to comply with the provisions of the above Bye-law. Some of the irregularities observed in this regardare given below:

a. Not opened separate bank account (s) for clients monies

b. Opened Separate Bank Account for clients monies but the same is not being operated.

c. Transfer of funds from the clients’ account to member’s own account for purposes other than permitted.

d. Utilising monies in the clients’ account for making payment for transaction done on the member’s own account.

e. Utilising the clients’ account for payment of office expenses, general charges, etc.

f. Making payment relating to capital expenditure from the clients’ account.

g. Having overdraft facilities in the clients’ account.

h. Making payments to the Exchange towards the base minimum capital and additional capital from the clients’account.

i. Financial accommodation/loans to other members from the clients’ account.

j. Not maintaining hard copies of inward/outward register for clients’ securities.

k. Not maintaining proper settlement-wise records of shares received delivered from/to clients, e.g. name, distinctivenumber of shares, date receipt and delivery etc.

l. Maintaining only covering letters for securities received delivered from clients.

4. In this connection, the members are advised that in terms of Bye-law 247A they are required to issue ContractNotes, in Form ‘A’ or ‘B’ as applicable, to the clients within 24 hours of the execution of the transaction. They arealso required to make payment to their clients for securities sold by them or deliver the securities purchased bythem within two working days of declaration of the payout by the Exchange for the relevant settlement unless theclients have requested otherwise.

5. The members are further advised that in case the transactions with the client are on principal to principal basis,then the Contracts Notes in Form ‘B’ should be issued and written consent from the client should be obtained ineach such individual case.

6. The members may further note that they are permitted to transfer the brokerage earned on the deals executed onbehalf of their clients to their own account if the proceeds of sale/purchase have been credited in the clients’account. The members are permitted to close-out any transaction if a client fails to make full payment of purchasesor fails to deliver the securities sold, within 48 hours of the delivering of the Contract Note for the same.

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7. Further, as per Rule 15(g) of the Securities Contracts (Regulation) Rules, 1957, the members are required to maintaindocuments, register showing full particulars of shares and securities received and delivered for a period of 5years.

8. The members are advised to ensure strict compliance with the provisions of Bye-Law 247A of the Rules, Bye-lawsand Regulations of the Exchange as explained above, while dealing with clients’ funds & securities.

9. A serious view may be taken if such irregularities are detected in future during inspection of books of the members.

10. In case members require any clarification, they may please contact the following persons

Sr.No. Name Intercom No.

1. Rajesh Gandhi 8281

2. Raghurama K. 8073

S.T. Gerela

Gen.Manager (Inspection & Surveillance)

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Notice no : 4646/97Notice date : November 29, 1997

NOTICE

RE : WAREHOUSING OF TRADES BY INSTITUTIONAL CLIENTS

In terms of Bye-law 247A of the Rules, Bye-laws and Regulations of the Exchange the members are required to issueContract Notes to clients for purchase/sale of securities within 24 hours of the execution of transactions.

The Securities and Exchange Board of India (SEBI) had received requests from market participants to permit‘warehousing’ of trades, i.e. execution of firm client order for a large quantity in parts during the same trading cycle(Settlement) and issue of a single Contract Note at the end of the trading cycle (settlement) at the weighted averageprice.

The matter was examined by SEBI and it has since been decided to permit the members of the Exchanges to warehouseInstitutional transactions, subject to the following conditions:

1. Warehousing would be permitted only in cases of Institutional (Fiis/IFIs/MFs/SCBs) Orders. Thus, any transactions,done either on own account or on behalf of a non-institutional client, would not be permitted to be warehoused.

2. Further, even in cases of Institutional orders, warehousing would be permitted where a registered Custodian isinvolved in the delivery/receipt of securities.

3. Warehousing would be permitted for both ‘Purchase’ and ‘Sale’ orders through the Normal Book (General Segment)and it would not be permitted for transactions entered/executed through ‘Negotiated Deal’, ‘All or None deal’ orany other segment.

4. The trading system software of the Exchange would provide a unique order number for identifying warehousingorders at the time of order entry itself.

5. The executed Warehousing transaction(s) would be parked in a separate ‘Client Warehousing Account’ openedfor this purpose by the members till they are contracted out.

6. Daily Margin would be charged by the Exchange on all Warehousing trades at the normal rates.

7. Members would have to issue a ‘Confirmation Note/Slip’ at the end of each trading day to the Institutional client forthe partial order executed. Such confirmation Note/Slip is required to be issued within 24 hours of the executionof partial order. All such Confirmation Notes/Slips so issued would bear the same client code, i.e. code of theInstitutional client placing the order, as also necessary details such as Warehousing Order No., Quantity, Rate andDate & Time of execution.

8. The ‘Contract Note’ should be issued by the members within 24 hours of completion of the order at the weightedaverage price. The details of all the trades executed for arriving at this weighted average price should be mentionedin the ‘Contract Note’ or as an Annexure to the Contract Note. The ‘Contract Note’ should bear the same clientcode as that on the Confirmation Notes/Slips issued earlier.

9. The order could be executed over a number of days within the same trading cycle. The carry forward of unexecuted/ pending portion of the order to the next trading cycle would not be permitted. This would be applicable even incases of scrips which are in No Delivery period.

10. All the warehousing transactions contracted out to Institutional clients should result in payment and deliveries.Warehoused transactions which do not result in issue of Contract Notes to the Institutional Client would be treatedas transactions on members own account.

11. The members should maintain adequate records to establish a clear audit trail to trace compliance of the proceduresfor execution of Institutional orders through warehousing.

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12. The Exchange is making suitable changes in the software to ensure compliance with conditions stipulated bySEBI. The date of implementation of the above provisions will be intimated to the members in due course.

13. In case members require any further clarification, they may please contact the following persons.

Sr.No. Name Intercom No.

1. Shri Khushro Bulsara 8241

2. Shri Neeraj Agarwal 8268

S.T. GerelaGen.Manager (Inspection & Surveillance)

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Notice no : 20020930-4Notice date : Monday, September 30, 2002Subject : Quoting of PAN on Contract NoteSegment Name : General

Contents :

The members of the Exchange are presently required to quote their PAN as well as the PAN of their constituents onthe contract note issued to clients, if the value of the contract exceeds Rs. 10 lakhs or more.

In this connection, the attention of the members of the Exchange is drawn to the amended Rule 114B of the IncomeTax Rules, 1962, whereby the minimum amount for quoting PAN while entering into a contract for trading in securities,has been reduced from Rs.10 lakhs to Rs.1 lakh.

The members are advised to please take note of the above and comply with the same.In case members require anyclarification, they may please contact Mr. K.J. Roy - Dy. Manager, Inspection Dept. on intercom No 8166.

S. S. VyasGeneral Manager (Inspection)

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Notice no : 20050926-11Notice date : Monday, September 26, 2005Subject : Compulsory PAN in respect of trades executed in the Derivatives segmentSegment Name : General

As per Notification No. 181/2005 (F.No. 142/13/2005-TPL-III), dated July 1, 2005 issued by the Income Tax Department,it is necessary for the Stock Exchange to ensure that the particulars of the clients in the Derivatives segment, includingthe Permanent Account Number (PAN), are duly maintained by it in order to be notified as a recognized stockexchange for the purpose of clause (d) of proviso to clause (v) of section 43 of the Income Tax Act, 1961.

It is therefore decided to require all the members in the Derivatives Segment to mandatorily collect PAN of all theirclients and upload the same as part of unique client code details uploaded to the Exchange, with effect from December1, 2005.

All members shall collect copies of the PAN Card issued to their clients by the Income Tax Department after dueverification and preserve the same in their records. Further, they shall also ensure that these PAN details of their clientsas they appear on the PAN card are correctly uploaded to the Exchange through the Unique Client Code (UCC)registration module of BSEwebx in respect of all their existing clients on or before November 30, 2005.

In respect of all their new clients, all members shall obtain copies of PAN cards issued by the Income Tax Department,maintain the same in their records after verifying with the original and upload the details to the Exchange through theUnique Client Code (UCC) registration module of BSEwebx with effect from December 1, 2005.

In view of the above requirements, the members shall not place any order on behalf of any client in the Derivativessegment of the Exchange unless the member has collected the above details and uploaded the same to the Exchange.

Members may kindly note that failure to adhere to the above requirements would be viewed seriously and suitabledisciplinary action, including withdrawal of trading facility in the Derivatives segment may be taken.

Members may contact Mr. Mukesh Kuwad on Extn. 8497 (Tel. No. 22721233/34) for any clarifications in this regard .For queries relating to client registration, members may contact Mr. Mohanan K. (Extn. 8416 ). Members may alsoseek assistance from their respective Relationship Managers in the Membership Services and Development Departmentin this regard.

P.K. Ramesh Mukesh KuwadDy. General Manager Dy. ManagerSurveillance & Supervision Surveillance & Supervision

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REGULATION 14(Bye-laws 205, 220, 221(a) and 222)BROKERAGE AND CONTRACT NOTES

BROKERAGE

14.1 Brokerage shall be charged by members at rates not exceeding the scale prescribed in Appendix A to this Regulationor such other scale as theGoverning Board may from time to time prescribe in modification or substitution thereof.

CONTRACT NOTES

14.2 Contract Notes issued by members to constituents when acting for them as agents and when dealing with them asprincipals shall be in 1 { accordance with }

Form A and Form B respectively prescribed in Appendix B to this Regulation or in such other form or forms as theGoverning Board may from time to time prescribe in addition thereto or in modification or in substitution thereof.

214.3 Confirmation Notes issued by SEBI Registered Sub-brokers to their Clients/Constituents when acting for them asAgents shall be in accordance with Form – C prescribed in Appendix B to this Regulation or in such other form asthe Governing Board may from time to time prescribe in addition thereto or in modification or in substitutionthereof.”

1 Added by Governing Board Resolution dated 3.9.57 (w.e.f.31.8.57)

2 Inserted by Governing Board Resolution dated 29.4.99

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(APPENDIX ‘A’ TO REGULATION 14)(Regulation 14.1)

Official Scale of Brokerage

Brokerage Rs.on Face Value

i) Securities of the Government of India andState Government of face value –

a) under Rs. 10,00,000/- 0.50%b) Rs. 10,00,000/- or over 0.25%

ii) Loans and Debentures of Port Trusts,Municipal Corporations and similar other bodies 0.50%

iii) Shares and/or Debentures of Joint 0.25 perStock Companies share/ Debenture or 2.5%

of the contract price perShare/DebentureWhichever is higher

iv) 2 Deleted

v) The scale prescribed in (i) to (iv) above is exclusive of service charges and does not apply to underwritingor the placing of new issues.

1. Last amended vide Governing Board Resolution dated 8.4.93

2. Deleted by Governing Board Resolution dated 8.3.97

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Notice no : 20051207-10Notice date : Wednesday, December 07, 2005Subject : Gazette Notification on Amendment to Rule 217 & Bye Laws 218(a) and (b) of Rules,

Bye Laws & Regulation of the Exchange regarding Commission termsSegment Name : General

Sub : Gazette Notification on Amendment to Rule 217 & Bye Laws 218(a) and (b) of Rules, Bye Laws & Regulationof the Exchange regarding Commission terms for Remisiers & Sharing of Brokerage

Trading Members of the Exchange are hereby informed that Rule 217 of the Rules, Bye Laws & Regulations of theExchange has been amended so as to allow the member to remunerate the remisier with such brokerage as agreedupon in writing by way of an agreement.

Bye Laws 218 (a) & (b) of the Rules, Bye Laws & Regulations of the Exchange has also been amended so that thesub brokers can also share brokerage with the member, in addition to the persons specified in the said Bye lawsand subject to such terms of brokerage as agreed upon in writing by way of agreement & as per the scale of brokerageprescribed by the Exchange or SEBI in this regard from time to time.

However in case member has transacted for sub broker the aggregate amount of brokerage charge by trading memberto sub broker and sub broker to his client shall not exceed the maximum scale of brokerage prescribed by the Exchange& SEBI in this regard.

The above said amendments have been approved by the SEBI and the same has been published in the MaharashtraGazette dated 28th October, 2005.

Copy of the Gazette Notification indicating the above said amendments is attached to this notice.

Members of the Exchange are requested to take note of the above.

Sunil N. Kapadia Mayank MehtaDy. Gen. Manager Asst. Gen. ManagerMembership Membership

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Notice no : 24512/99

NOTICE

Members of the Exchange are hereby informed that Securities and Exchange Board of India (SEBI) vide its PressRelease No.PR 202/99 dated September 1, 1999 has directed that henceforth all negotiated deals (including as crossdeals) will no longer be permitted in the existing manner. As per the SEBI directive all negotiated deals will be permittedonly if these are executed on screen in the price and order matching mechanism of the Exchange just like any othernormal trade. The aforesaid will be implemented w.e.f. Settlement No.25/1999-2000 of “A,B1,B2 & C” group securities.(First Day of Trading : September 6, 1999).

The said press release further states that negotiated deals in respect of listed corporate debt securities (F group) willnot be permitted and all such trades will have to be executed on the price and order matching mechanism of theexchange as in the case of equities. This would be implemented w.e.f. Settlement No.25/1999-2000 of “F” groupsecurities (First Day of Trading : September 9, 1999). The decision does not apply to government debt securities andmoney market instruments as these are under the regulatory jurisdiction of RBI.

In case of any queries/clarifications, members may contact the under mentioned officials.

Sr.No. Name Intercom No.

1. Ms. S. Sudha – Manager,MOD 8233

2. Ms. Netra Sahani – Dy.Manager,MOD 8304

Thursday, A.N.JoshiSeptember 2, 1999. Executive Director.

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Bye-law

Specific Bargains

26. The Governing Board or the President may permit specific bargains to be made in the case of securities of publicCompanies or corporate bodies not admitted to dealings on the Exchange.

Bye-law

Member as Principal

199. When executing an order a member may buy or sell securities for his own account as a principal provided he hasobtained the consent or authority of his constituent thereto if such constituent be a person other than a member ofa Stock Exchange recognised under the Securities Contracts (Regulation) Act 1956 and provided that the price isfair and justified by the condition of the market:

Provided further that where the member has secured the consent or authority of such constituent otherwise thanin writing he shall secure written confirmation by such constituent of such consent or authority within three daysfrom the date of the contract:

Provided further that no such written consent or authority of such constituent shall be necessary for closing-outany outstanding contract entered into by such constituent in accordance with the provisions of these Bye-laws andRegulations.

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SEBI Circular SMD/RCG/CIR/(BKG)/293/95DIVISION CHIEF March 14, 1995

To,The Presidents/Executive Directorof all the Stock Exchanges.

Dear Sir,

Reporting of spot and off-the-floor transactions.

The issue of reporting spot transactions and off the floor transactions has been taken up with the exchanges on severaloccasions.

It has been observed that even though this is a requirement under the exchange regulations, it is not being observedin actual practice.

The exchange is, therefore, directed to take steps to ensure that:-

1. Brokers are required to report all transactions done on a spot basis on the same day.

2 Brokers are required to report on the same day all transactions adjusted in their books -whether betweentwo clients or whether between a client and the broker as a principal.

The exchange is advised to inform us about the steps taken in this regard not later than April 10, 1995. The exchangesmust also send a report to SEBI indicating the trading floor volumes and off-exchanges volumes separately.

Yours faithfully,

sd/-R.C. GUPTA

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Notice no : 20040306-9Notice date : Saturday, March 06, 2004Subject : Automated Reporting of Spot DealsSegment Name : General

Contents :

Sub : Automated Reporting of Spot Deals

In terms of the provisions of the Bye Law 48 of the Rules, Bye-laws & Regulations of the Exchange the members ofthe Exchange are allowed to enter into Spot Delivery Bargains. However, till date the facility of reporting, executionand settlement of these Spot Delivery Bargains was not available on BOLT system of the Exchange. The membershave been reporting such deals after execution by way of a letter to the Exchange.

The Exchange has now provided a facility on BOLT to the members to report on-line Spot Delivery Bargains for Cashand Debt segment. W.e.f. March 8, 2004 members can use DUS Software (available for downloading through DLOAD32)to report these transactions (The operational instructions for using the software are enclosed as Annexure I).

Members may please note that the settlement of these Spot Delivery Bargains would continue to be done outside theExchange on off- market basis within the prescribed time limit. The settlement of these bargains are not guaranteedby the Exchange.

The members would be required to settle such deals as per the provision of Section 2( i ) of the Securities Contracts(Regulation) Act, 1956 and confirm about the same to the Exchange through the above facility. If the members do notreport settlement of the Spot Delivery Bargains on the BOLT System within the prescribed time limit, then the provisionsmentioned at Point 15 to 19 of the Exchange Notice No. 20031112-5 dated November 12, 2003 would be invoked.The members should comply with the requirements mentioned in point 15 to 19 of the Exchange Notice No.20031112-5 dated November 12, 2003 while entering into Spot Delivery Bargains.

The members may please note that they would be allowed to enter into these bargains only in the scrips listed & notSuspended on the Exchange. As such, the scrips not listed on the Exchange would continue to attract the provisionsof the specific bargains etc, through the existing procedures for the same. In case of any query / clarification, membersmay please contact any of the under mentioned officials :

Sr. Name IntercomNo. No.

1. Mr. K. Mohanan – Operating Instructions for Software 8416

2. Mr. Hrishikesh Sukhtankar - – Operating Instructions for Software 8081

3. Mr. Prakash Bhatt – Cash Segment 8466

4. Mr. Ajay M. Kanavi – Debt Segment 8586

S.J. KapurGeneral Manager – Clearing & Settlement.Encl: As above

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Annexure – I

OPERATIONAL INSTRUCTION FOR SPOT TRANSACTIONS SCREEN FROM DUS.

This DUS software is available to the members through DLOAD32. The member can use this software to report theSPOT transaction done by him. Operational procedures are as mentioned below

Login Screen

The member will have to login to the DUS software thru this screen.Drive : This is the drive where the DUS softwarehas been installed on the PC. It can be C drive or D drive or E driveetc.

Broker Code : Same login as BDCUPLOAD login eg B9999 (where9999 is the member number)

Password : Password – Same as settlement download password.

After providing the broker code and password the username is validated. If valid user then the menu is displayed.

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Menu

As shown in the screen above the member has to select the Spot Deal Entry option from the Clearing andSettlement option under Department menu.

After selecting this Spot Deal Entry option the Spot Deal entry screen is displayed.

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Spot Deal Entry

This is the spot deal entry screen. The entry of each field is explained below.

Data Item Description Remarks

Member No. This field is only display field. The value in thisfield is picked up from the broker code which isentered in the login screen

Segment Type Either Cash or Debt Since the spot deals in both the segment haveto be reported, the member has a choice toselect between Cash segment and Debtsegment, whichever deal he is reporting.

Scrip Code To be selected from the drop down menu provided The member has to select from the drop downin the software. menu of scrip code. These scrip codes are the

ones, which are valid on bolt. The member has to download the scripmaster everyday to have thecomplete and correct scrip master

Scrip Name This is a display only field. The moment thescrip code is selected the corresponding scripname that is reflected on BOLT is displayed.

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Bargain The date on which the trade is executedExecution Date

Client Code The name of the client on who’s behalfthe trade is done

Client Name Name the client

Client Address Address of the client

Transaction Whether it is a purchase transaction orType a Sale transaction

Security Type Whether Equity or Debenture

Quantity Quantity of the trade

Contract Price The rate at which the trade is executed

Contract The contract number of the dealNumber

Reporting Whether the member is reporting aStatus trade , or a settlement of the trade

or both in single screen

Deal Date Date on which the deal is done

Settlement Date Date on which the trade is settled.

Navigation

Add New Records

• After entering the entire information for a trade then the user has to click the save record button.

• After saving the record the screen will again be in an insert mode where the user can enter a new record.

Modify Records

• To modify any records using the navigation buttons. <First>,<Prev>,<Next>,<Last> Navigate to the record that needsmodifications

• Modify the contents of the record

• Click on the <Save Modification> button to save the modifications.

Delete Records

• To delete a particular record navigate using the <First>,<Prev>,<Next>,<Last> to the record that need to be deleted.

• Click on the delete button to delete the record.

• A message will be displayed indicating that the record has been successfully deleted.

Uploading the Records

• After the entry of all the trades and settlement is done

• Click on the Upload button.

• All the records that were entered will be copied into a file called SPddmmyy.txt

• This file will be uploaded to BSE

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Guidelines

Reporting only Trade :

The member can report only trade on a particular day and settlement of that trade of the following day. To report onlytrade the member has to be sure that the reporting status is set to trade. The member will be prompted to enter allthe information except the date of settlement.

Reporting only Settlement :

It may so happen that the member wants to report the settlement of the trade, which he has already reported before.In this case the member will have to enter all the information pertaining to that trade and then enter the settlementdate of the trade. Here the member has to be sure that the reporting status that is selected is settlement.

Reporting both Trade and Settlement :

If the member wants to report both trade and settlement on the same day, then the reporting status that he selects willbe both. In this case the member can enter the trade details as well as the settlement date to denote that he is settlingthe trade on the same day.

Assumptions :

• The contract number for reporting both the trade and settlement will be the same

• The data will be valid for a particular day.

• Everyday the records will be reset.

• Through out the day the member can upload the file as many times as you want but only the last file will be considered

as valid.

Location of the file

Daily the file will be created and stored in path \ dus \ <SPddmmyy.txt>

This file will be a pipe delimited text file.

This file can be viewed in any text editor

The order of fields in the file is as follows.

1 Segment Type

2 Member No

3 Scrip Code

4 Bargain Execution date

5 Client Code

6 Client Name

7 Client Address

8 Transaction Type

9 Type of Security

10 Reporting Status

11 Quantity

12 Contract No.

13 Contract Price

14 Deal Date

15 Settlement Date

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Section 2 (i) of SCRA, 1956

[(i) spot delivery contract means a contract which provides for,-

(a) actual delivery of securities and the payment of a price therefor either on the same day as the date of the contractor on the next day, the actual period taken for the despatch of the securities or the remittance of money thereforthrough the post being excluded from the computation of the period aforesaid if the parties to the contract do notreside in the same town or locality;

(b) transfer of the securities by the depository from the account of a beneficial owner to the account of anotherbeneficial owner when such securities are dealt with by a depository;]7

Regulation 17(1) of SEBI (Stock Brokers & Sub Brokers) Rules, 1992.

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CHAPTER IVGENERAL OBLIGATIONS AND RESPONSIBILITIES

To maintain proper books of accounts, records etc.

17 (1) Every stock-broker shall keep and maintain the following books of accounts, records and documents namely; -.

(a) Register of transactions (Sauda Book);

(b) Clients ledger;

(c) General ledger;

(d) Journals;

(e) Cash book;

(f) Bank pass book;

(g) Documents register should include particulars of shares and securities received and delivered;

(h) Members’ contract books showing details of all contracts entered into by him with other members of thesame exchange or counterfoils or duplicates of memos of confirmation issued to such other member;

(i) Counterfoils or duplicates of contract notes issued to clients;

(j) Written consent of clients in respect of contracts entered into as principals;

(k) Margin deposit book;

(l) Registers of accounts of sub- brokers;

(m) an agreement with a sub- broker specifying the scope of authority and responsibilities of the Stock-Brokerand such sub- broker.

(2) Every stock-broker shall intimate to the Board the place where the books of accounts, records and documents aremaintained.

(3) Without prejudice to sub- regulation (1), every stock- broker shall, after the close of each accounting period furnishto the Board if so required as soon as possible but not later than six months from the close of the said period acopy of the audited balance sheet and profit and loss account, as at the end of the said accounting period:

Provided that, if it is not possible to furnish the above documents within the time specified, the stock-broker shallkeep the Board informed of the same together with the reasons for the delay and the period of time by which suchdocuments would be furnished.

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Rule 15 of SC (R ) Rules, 1957

15. Books of account and other documents to be maintained and preserved by every member of a recognised stockexchange

(1) Every member of a recognised stock exchange shall maintain and preserve the following books of account anddocuments for a period of five years:

(a) Register of transactions (Sauda book).

(b) Clients’ ledger.

(c) General ledger.

(d) Journals.

(e) Cash book.

(f) Bank pass-book.

(g) Documents register showing full particulars of shares and securities received and delivered.

(2) Every member of a recognised stock exchange shall maintain and preserve the following documents for a periodof two years:

(a) Members’ contract books showing details of all contracts entered into by him with other members of thesame exchange or counter-foils or duplicates of memos of confirmation issued to such other members.

(b) Counter-foils or duplicates of contract notes issued to clients.

(c) Written consent of clients in respect of contracts entered into as principals.

101

Notice no : 20050805-20Notice date : Friday, August 05, 2005Subject : Maintenance of books of accounts and other documentsSegment Name : General

Members of the Exchange are hereby informed that SEBI has issued circular No. SEBI/MRD/SE/Cir-15/2005 datedAugust 4, 2005 regarding the maintenance of books of accounts and other documents.

A copy of the above-mentioned SEBI circular, which is self-explanatory, is enclosed herewith for your ready reference.The SEBI circular is also available on the SEBI website www.sebi.gov.in.

Members are required to comply with the provisions of the above-mentioned SEBI circular.

P.K.Ramesh Kritika DagaDy. General Manager Asst.General ManagerSurveillance and Supervision Surveillance & Supervision

GENERAL MANAGERMarket Regulation DepartmentDivision of Policy

SEBI/MRD/SE/Cir-15/2005August 4, 2005

The Executive Directors / Managing Director /

Administrators of All Stock Exchanges

Dear Sir / Madam,

Sub: Maintenance of books of accounts and other documents

1. In terms of Rules 14 and 15 of Securities Contracts (Regulation) Rules, 1957 (hereinafter referred to as SCRR,1957), every recognized stock exchange and its members are required to maintain and preserve the specifiedbooks of account and documents for a period ranging from two years to five years. Further, as per regulation 18 ofSEBI (Stock Brokers & Sub-brokers) Regulations, 1992 (hereinafter referred to as Stock Broker Regulations),every stock broker shall preserve the specified books of account and other records for a minimum period of fiveyears.

2. It is noticed that enforcement agencies like CBI, Police, Crime Branch etc. have been collecting copies of thevarious records/documents during the course of their investigation. These original documents both in physicalform and electronic form would be required by such enforcement agencies during trial of the case also.

3. In view of the above, not withstanding anything contained in SCRR, 1957 and the Stock Broker Regulations, youare advised to preserve the originals of the documents, both in electronic and physical form, copies of which havebeen taken by CBI, Police or any other enforcement agency during the course of any investigation till the trial iscompleted.

4. All the Stock Exchanges are advised to:-

a) implement the above with immediate effect by making necessary amendments to the bye-laws and ListingAgreement, as applicable ;

b) to bring the provisions of this circular to the notice of their members of the exchange and also to put up thesame on the website; and

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c) communicate to SEBI the status of the implementation of the provisions of this circular and the action takenin this regard in Section II, item no. 13 of the Monthly Development Report for the month of August 2005.

5. This circular is being issued in exercise of the powers conferred by Section 11(1) of Securities and ExchangeBoard of India Act, 1992 to protect the interest of investors in securities and to promote the development of, andto regulate, the securities market.

Yours faithfully,

V S SUNDARESAN

103

Notice no : 20051227-18Notice date : Tuesday, December 27, 2005Subject : Maintenance of Books of Accounts and other documentsSegment Name : General

Maintenance of Books of Accounts and other documents.

Attention of the Trading Members of the Exchange is drawn to our Notice No. 20050805-20 dated August 05, 2005regarding Maintenance of Books of Accounts and other documents, wherein the members were advised to complywith the provisions of SEBI circular no. SEBI/MRD/SE/Cir-15/2005 dated August 4, 2005.

Securities and Exchange Board of India vide circular no SEBI/MRD/SE/Cir-23/05 dated December 22, 2005 has issueda Corrigendum to their above circular partially modifying point 3 of their earlier circular.

A copy of the above circular dated December 22, 2005 is enclosed herewith for your ready reference. The SEBI circularis also available on the SEBI website www.sebi.gov.in.

Trading members are required to comply with the provisions of the above-mentioned SEBI circulars.

P. K. Ramesh Pankaj GuptaDy. General Manager Asst. General ManagerSurveillance & Supervision Surveillance & Supervision

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GENERAL MANAGERMarket Regulation Department

SEBI/MRD/SE/Cir- 23 /05December 22, 2005

The Executive Directors / Managing Director / CEOAdministrators of All Stock Exchanges

Dear Sir / Madam,

Sub : Corrigendum to Circular No. SEBI/MRD/SE/Cir-15/2005 dated August 04, 2005

1. Please refer to our above said circular regarding maintenance of books of accounts and other documents by thestock exchanges and its members when enforcement agencies like CBI, Police, Crime Branch etc. collect thecopies of the records/documents during the course of their investigation.

2. In partial modification, the earlier point 3 which stated as :-

“In view of the above, not withstanding anything contained in SCRR, 1957 and the Stock Broker Regulations, youare advised to preserve the originals of the documents, both in electronic and physical form, copies of which havebeen taken by CBI, Police or any other enforcement agency during the course of any investigation till the trial iscompleted.”

may please be replaced by :-

“In view of the above, you are advised to preserve the originals of the documents, both in electronic and physicalform, copies of which have been taken by CBI, Police or any other enforcement agency during the course of anyinvestigation till the trial is completed.”

3. It may be noted that the other provisions of the said circular would remain unchanged.

4. All the Stock Exchanges are advised to:-

a) implement the above with immediate effect by making necessary amendments to the bye-laws and ListingAgreement, as applicable ;

b) to bring the provisions of this circular to the notice of their members of the exchange and also to put up the sameon the website; and

c) communicate to SEBI the status of the implementation of the provisions of this circular and the action taken in thisregard in Section II, item no. 13 of the Monthly Development Report for the month of January 2006.

5. This circular is being issued in exercise of the powers conferred by Section 11(1) of Securities and Exchange Board ofIndia Act, 1992 to protect the interest of investors in securities and to promote the development of, and to regulate, thesecurities market.

Yours faithfully,

V S SUNDARESAN

105

Notice no : 7031/94

Notice date : Tuesday, December 6, 1994

NOTICE

1. The Securities and Exchange Board of India (SEBI) has, in exercise of the powers conferred by section 10(1) ofthe Securities Contracts (Regulation) Act, 1956, amended the Bye-laws of The Stock Exchange, Bombay byinserting Bye-law 247A regarding the regulation of transactions between clients and brokers. A copy of the text ofthe new Bye-law 247A is enclosed for the information of the members. We have been informed that Notificationin this connection has been published in the Official Gazette of the Government of India. Accordingly, in terms ofsection 10(2) of the Securities Contracts (Regulation) Act, 1956, the new Bye-law has come into effect. Membersare, therefore, advised to keep the provision of the new Bye-law 247A in view while conducting their business.

2. The Salient feature of the new Bye-law 247A are:

a. segregation of clients’ monies from the broker’s own money by operating separate accounts for this purpose.

b. Segregation of clients’ securities from the broker’s own securities and maintenance of separate accounts for thispurpose.

c. Payment of money to clients or delivery of securities to clients within two working days of the pay out.

d. Issuance of the contract note within 24 hours of the execution of the contract.

3. The new Bye-law also contains provisions by which the broker can close out transactions of the client who fails tomake full payment to the broker or to deliver securities sold within 48 hours of the delivery of the contract note.

4. For better understanding of all these requirements, the member brokers are requested to refer to the enclosedcopy of the new Bye-law.

5. Inspections carried out by the Inspection Department of the Exchange will henceforth include inspection of theimplementation of Bye-law 247A also, wherever required.

A. N. KOLHATKAR

EXECUTIVE DIRECTOR.

106

Notice no : 20020917-2Notice date : Tuesday, September 17, 2002Subject : Payment of monies and delivery of securities by the members to ClientsSegment Name : General

Contents :

Sub : Payment of monies and delivery of securities by the members to clients

1. As per Bye-law 247 A of the Rules, Bye-law and Regulations of the Exchange, the members are required to makepayments for securities sold and/ or deliver securities purchased to their clients within two working days of declarationof the pay-out of the settlement by the Exchange unless a client has requested otherwise.

2. It is observed that the above provisions were incorporated in the Bye-laws of the Exchange when the transactionswere settled by delivery of securities in physical form which required counting, examination, sorting and addressingthe issue related to settlement objections etc. The Exchange has since introduced T+3 settlement cycle, whereover 99% of the trades are settled in demat mode. The Exchange has also provided a facility to the members ofdirect credit of pay-out securities to the beneficiary accounts of their clients on the Pay-out day itself.

3. In view of the above, and as an investor friendly measure, the Governing Board of the Exchange at its meetingheld on September 13, 2002 has decided that members would henceforth be required to make payment and/ ordeliver securities to their clients within one working day (excluding Saturday, Sunday and Bank holidays) after thePay-out of the settlement, unless a client has requested otherwise. This will come into effect from pay-out ofSettlement No.DR-124/02-03, which is scheduled on September 23, 2002.

4. This measure, it is expected, will benefit the investors and enhance the utilization of funds and securities by them.

5. The members are requested to please take note of the above and ensure strict compliance with the same. Thefailure to adhere to the above decision will invite penal action indicated vide items Nos.11 & 12 of Section I ofNotice No. 130706/2002 dated July 31, 2002.6. In case members require any further clarification, they may pleasecontact any of the following officials:

Sr. No. Name Intercom No.

1 Shri Prakash Bhat 8466

2 Shri Ashwin Dattani 8157

S.T. Gerela

Chief Executive Officer- Clearing & Settlement

107

Notice no : 20030903-5Notice date : Wednesday, September 03, 2003Subject : Mode of payment and deliverySegment Name : General

CONTENTS :

Sub: Mode of payment and delivery

SEBI has issued a circular no. SEBI/MRD/SE/Cir- 33/2003/27/08 dated August 27, 2003 (copy enclosed herewith)regarding cash transactions between stock brokers and their constituents, the relevant contents of which are givenbelow.

Quote

1. Please refer to SEBI circular No.SMD/SED/CIR/93/23321 and letter No. SMD-1/23341 dated November 18, 1993regarding regulation of transactions between clients and brokers.

2. It is reiterated that brokers and sub-brokers should not accept cash from the client whether against obligations oras margin for purchase of securities and / or give cash against sale of securities to the clients.

3. All payments shall be received / made by the brokers from / to the clients strictly by account payee crossedcheques / demand drafts or by way of direct credit into the bank account through EFT, or any other mode allowedby RBI. The brokers shall accept cheques drawn only by the clients and also issue cheques in favour of the clientsonly, for their transactions. However, in exceptional circumstances the broker or sub-broker may receive theamount in cash, to the extent not in violation of the Income Tax requirement as may be in force from time to time.

4. Similarly in the case of securities also giving / taking delivery of securities in “demat mode” should be directly to /from the “beneficiary accounts” of the clients except delivery of securities to a recognized entity under the approvedscheme of the stock exchange and / or SEBI.

5. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and ExchangeBoard of India Act, 1992, read with Section 10 of the Securities Contracts (Regulation) Act 1956, to protect theinterests of investors in securities and to promote the development of, and to regulate the securities market.

Unquote

Members are advised to take note of the above and also to bring the contents of this Circular to the notice of theirregistered sub-brokers and constituents, and to ensure strict adherence to the same. Members are also informed thatany violation of the same will also be construed as violation of the Rules, Byelaws and Regulations of the Exchange,thereby entailing appropriate disciplinary action by the Exchange.

For any clarification in the matter, members may contact any of the following officials

All the members are requested to co-operate and ensure compliance.

Kevin Desouza, Mayank Mehta,Chief General Manager, Asst. General ManagerInspection & Membership Inspection

Sr.No. Name Intercom No.

1. Shri Ranjan Prabhu 8214

2. Ms. Smita P. Dave 8073

108

Notice no : 20050324-21Notice date : Thursday, March 24, 2005Subject : Mode of payment and deliverySegment Name : General

This is in continuation of our Notice No. 20030903-5 dated September 3, 2003.

In this regard it is reiterated that SEBI vide its Circular No. SEBI/MRD/SE/Cir-33/2003/27/08 dated August 27, 2003SEBI has directed that brokers and sub-brokers should not accept cash from the clients whether against obligationsor as margin for purchase of securities and / or give cash against sale of securities to the clients.

However, in the said circular it has also been stated that in exceptional circumstances the brokers or sub-broker mayreceive the amount in cash to the extent not in violation of the Income Tax requirements in force.

In view of the above, when such “exceptional circumstances” arise the members are directed to inform the Departmentof Surveillance & Supervision of the Exchange within 15 days to seek an approval in this regard on a case to casebasis.

For any clarification in this matter, members may contact the following personnel of the Surveillance & SupervisionDepartment .

Name Extn. Nos.

Sanjay Pai 8356

Sandeep Gupta 8153

All the members are requested to co-operate and ensure compliance in this respect.

P.K. Ramesh Kritika DagaDy. General Manager Asst. General ManagerSurveillance & Supervision Surveillance & Supervision

109

Notice no : 20020906-3Notice date : Friday, September 06, 2002Subject : Statement of Accounts of funds/securitiesSegment Name : Equity

Contents :

To,All Members of the Exchange

Sub : Statement of accounts of funds / securities.

It has been observed by the Exchange, that a large number of disputes arise between the members / sub-brokers and their clients due to non-communication of statement of accounts of funds / securities by themembers / sub-brokers on a regular basis.

In order to avoid such incidences, members / sub-brokers are advised to follow the following practices :-

1. Every member shall send to their clients a complete ‘Statement of Accounts’ for both funds and securities inrespect of each of its clients at least once in every six months within a month of the expiry of the said period. Thestatement shall also state that the client shall report errors, if any, in the statement within 30 days of receiptthereof, to the member / sub-broker.

2. It would be treated as sufficient compliance if the members take confirmation from their clients at least once in sixmonths to the effect that no securities and / or funds are due from the member to the client.

3. In case of those members who offer trading facility to their clients through internet and provide an access to an on-line accounting viewing and print-out facility, it would be treated as sufficient compliance, if they send the ‘Statementof Accounts’ by email to such clients.

4. In respect of institutional clients, the said requirement is applicable in case the members pay or receive funds andreceive or deliver securities from or to the institutional clients directly and not through custodians.

The members are also advised to send the statement of accounts for the financial year 2001-02 and quarter endedJune 2002, to their clients latest by 30th September 2002.

For any further clarification, you may kindly contact your Account Manager on the hotline or on Tel No. (022) 272 2624in Membership Services Department, 1st Floor, Rotunda Building.

Sunil VichareGeneral ManagerMembership Services Department

110

Notice no : 20030114-9Notice date : Tuesday, January 14, 2003Subject : Furnishing of Statements of accounts of funds / securities to clientsSegment Name : General

CONTENTS :

The members were advised vide Notice No 20020906-3 dated September 6, 2002 that they would be required to sendto each of their clients a complete ‘Statement of Accounts’ for both funds and securities, at least once in every sixmonths within one month of the expiry of the said period. This statement was also required to advise the clients toreport errors, if any, in the statement, to the member within 30 days of receipt thereof. The members were furtheradvised to take confirmation from their clients at least once in six months to the effect that no securities/funds are dueto them from the member.

In this connection, it has now been decided that, it would be treated as sufficient compliance of the requirements ofthe above Notice, if the members send the complete ‘Statement of Accounts’ for both funds and securities, to each oftheir clients, at least once in every six months, within one month of the expiry of the said period and advising theclients to report errors, if any, in the statement, to the member within 30 days of receipt thereof.

In case members require any further clarifications, they may please contact the concerned Account Managers of theMembership Services Department.

Sunil VichareGeneral ManagerMembership Services

111

Notice no : 20040827-11Notice date : Friday, August 27, 2004Subject : Uniform Documentary Requirements for trading.Segment Name : General

CONTENTS :

Sub : Uniform Documentary Requirements for trading.

Members of the Exchange are hereby informed that the Securities and Exchange Board of India (SEBI) vide its Circularno.SEBI/MIRSD/DPS-1/Cir-31/2004 dated August 26, 2004 (copy enclosed) has informed that in order to bring aboutuniformity in documentary requirements across different segments and Exchanges and also to avoid duplication andmultiplicity of documents, SEBI in consultation with Stock Exchanges (BSE and NSE) has formulated uniform set ofdocuments which are listed below :

1. Client Registration Form (Uniform across all the segments and exchanges where the broker is trading on differentsegments and exchanges) – Annexure –1.

2. Member Clients Agreements. (Uniform across all the segments of an exchange. However a separate agreementin the same format would be required for each of the exchanges where the broker is trading on different exchanges)– Annexure - 2.

3. Model Tripartite Agreement between Broker-Sub broker and Clients (Applicable only in cash segment and aseparate agreement in the same format would be required for each of the exchanges)–Annexure-3.\

4. Uniform Risk Disclosure Documents. (Uniform across all the segments and exchanges) – Annexure - 4.

5. Broker Sub broker agreement – Annexure 5.

SEBI in its above mentioned circular has stated that the documents prescribed above are model formats. The stockexchanges/stock broker may incorporate any additional clauses in these documents provided these are not in conflictwith any of the clauses in the model document, as also the Rules, Regulations, Articles, Byelaws, circulars, directivesand guidelines.

Further, the requirement of obtaining Client Registration Form may be waived for SEBI registered Foreign InstitutionInvestor, Mutual Funds, Venture Capital Funds and Foreign Venture Capital Investors, Scheduled Commercial Banks,Multilateral and Bilateral Development Financial Institutions, State Industrial Development Corporations, InsuranceCompanies registered with the Insurance Regulatory Development Authority (IRDA) and Public Financial Institution asdefined under section 4A of the Companies Act, 1956. Further the stock broker and these clients may at their discretion,decide about the requirement of entering into broker-client agreement and bringing the contents of Risk DisclosureDocument to the notice of such clients.

The members are required to comply with the requirements mentioned in the said SEBI circular with immediate effectexcept the requirement relating to Tripartite Agreement between Broker-Sub broker and clients of sub-broker whichwill come into effect from December 1, 2004.

The members are requested to note the same.

Kevin Desouza Mayank J. MehtaChief General Manager AGM - InspectionMembership & Inspection

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Annexure I

1. The following format has to be obtained from all clients (other than institutional clients)

2. Separate form to be obtained in respect of all clients including PMS clients

3. All columns are to be filled in by the clients and copies of relevant supporting documents need to be attached bythe clients

FORMAT FOR INDIVIDUAL CLIENT REGISTRATION FORM

(This information is the sole property of the trading member brokerage house and would not be disclosed to anyoneunless required by law or except with the express permission of clients)

To,

Trading Member’s Clearing Member’sName, Address, Telephone No. Name, Address, Telephone NO.SEBI Registration No. SEBI Registration No.

(Applicable for derivatives segment)

1. Name of the client

(Surname) (Name) (Middle Name)

2. Unique Identification Number (where obtained)

3. Sex Male Female

4. Date of Birth dd/mm/yyyy

5. Marital Status :

6. Residene Address :

City :

Pin Code :

State :

Country :

Nationality :

Telephone Number (Res.) Fax No.

Residential Status : Indian NRI Others

Photographplease sign on the

photograph

Client Information

113

7. Bank and Depository Account Details

Bank Name (through which transactions will generally be routed)

Branch

Address

Account No.

Account Type : Saving / Current NRI Others :

(Copy of a canceled Cheque leaf/pas book/bank statement containing name of the constituent should be submitted)

Depository Participant Nmae (through which transactions will generally be rotted

Address

BO Account Number

8. Occupation Details

Occupation : Employed Self Employed Business

Proffessional House wife Others (Tick whichever is applicable)

9. If Employed

Name of Employer :

Office Address :

City :

Pin Code :

State :

Country :

Telephone Number (Office) :

Fax No. Telex No. :

10. If Self Employed / Business / Professional OthersName of the establishmentOffice Address :

Pin Code :

City : State :

Country :

Telephone Number (Office)

Fax No. / Telex No.

11. Financial details of the constituent :

Income Range (Per Annum) : (Tick where applicables)

Below Rs.1,00,000

Rs. 1,00,000 To Rs.5,00,000

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Rs. 5,00,000 To Rs.10,00,000

Rs. 10,00,000 To Rs.25,00,000

Above Rs.25,00,000

12. Investment/Trading Experience

No. Prior Experience

Years in Stocks

Years in Derivatives

Years in Other investment related fields

13. Trading Preference

A. Stock Exchanges on which you wish to trade (if the member is registered for such Exchanges) : (Please tick in the relevant Box)

1.

2.

3.

B. Market segments you wish to trade (if the member is registered for such segment)

1. Capital Market Cash Segment

2. Derivatives Market

3. Debt Market

14. Whether registered with any other broker-member (if registered with multiple members, provide details of all)

Name of Broker :

Name of Exchange :

Client Code No.:

15. Details of any action taken by SEBI Stock exchange any other authority for violation of securities laws other economicoffences

16. References

Introduction : Introduced by another constituent/director or employee of trading member any other person (please specify)

Name of the Introducer : (Surname) (Name) (Middle Name)

Signature

MAPIN UID No. of introducer, if any

Name and designation of the employee who interviewed the client :

(Name) (Designation)

Signature of the employee :

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17. Declaration

I hereby declare that the details furnished above are true and correct to the bestof my knowledge and belief and Iundertake to inform you of any changes therein immediately. In case any of the above information is found to be falseor untrue or misleading or misrepresenting I am aware that I may be held liable for it.

(Signature of the individual constituent)

Place : Date :

DOCUMENTARY REQUIREMENTS

Copies of the following documents may be obtained after due verification with the originals thereof

For Proof of Identity (any one of the following)

MAPIN UID Card Pan No. Passport Voter ID

Driving license Photo Identity card issued by Employer registered under MAPIN

For Proof of Address (any one of the following) :

Passport Voter ID Driving License

Bank Passbook Rent Agreement Ration Card

Flat Maintenance Bill Telephone Bill Electricity Bill

Certificate issued by employer registered under MAPIN Insurance Policy

For Office Purposes :

Unique Constituent Code :

(To be Inserted By The Brokerage Firm)

Original documents

Verified By Authorised By :

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The following format has to be obtained from all constituents (other than institutional clients)

1. Separate form to be obtained in respect of all clients including PMS clients

2. All columns are to be filled in by the clients and copies of relevant supporting documents need to be attached bythe constituents.

FORMAT OF THE CLIENT REGISTRATION FORM FOR CORPORATES, FIRMS AND OTHERS

(This information is the sole property of the trading member brokerage house and would not be disclosed toanyoneunless required by law or in case of express permission of clients)

ToTRADING MEMBER’S CLEARING MEMBER’SName, Address, Telephone No. Name, Address, Telephone No.SEBI Registration No. SEBI Registration No.

(Applicable for derivatives segment)

1. Name of the Company / Firm

2. Unique Identification Number (where obtained)

3. Registered Office Address :

City : Pin Code

State :

Phone Numbers Fax Numbers

4. Address for correspondence :

City : Pin Code

State :

Phone Numbers Fax Numbers

5. Date of incorporation / formation :

6. Date of commencement of business :

7. Nature of Business :

8. Registration number (with ROC, SEBI or any government authority)

9. Details of PAN Account Number

10. Name of Promoters / Partners / Karta and residential address

1.

2.

3.

4.

5.

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11. Names of whole time directors and residential address

1.

2.

3.

4.

5.

12. Names and Designation of persons authorized to deal in securities on behalf of the company firm others and theirresidential address

1.

2.

3.

4.

5.

13 . Details of any action taken by SEBI / Stock exchange / any otherauthority against the constituent or its Partners /promoters / whole time directors / authorized persons in charge of dealing in securities forviolation of securitieslaws other economic offenes.

Bank and Depository Account Details

14. Bank Name (through whciuh transactions will generally be routed)

Baranch :

Address :

Account No. Account Type

(Copy of a canceled Cheque leaf/pass book/bank sttement containing name of the constituent should be submitted.)

15. Depository Participant Name (through which transactions will be routed)

Address :

BO Account Number :

16. Investment / Trading Experience

No Prior Experience

Years in Stocks

Years in Derivatives

Years in Other investment related fields

17. Trading Preference :

A. Stock Exchanges on which you wish to trade (if the member is registerd for such Exchanges) :(Please tick in the relevant boxes)

1.

2.

3.

B. Market segments you wish to trade (if the member is registered for such segment)(Please tick in the relevant boxes)

1. Capital Market / Cash Segment

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2. Derivatives Market

3. Debt Market

18. Whether registerd with any other broker-member (if registered with multiple members, provide details of all)

Name Broker :

Name of Exchange :

Client code no.(as given by the broker)

19. References

Introduction : Introduced by another constituent / director or employee of trading member / any other prson (pleaespecify)

Name of the Introducer :

(Surname) (Name) (Middle Name)

Signature :

MAPIN UID No. of introducer, if any :

Name and designation of the employee who interviewed the client

Name Designation

Signature of the employee

20. Declaration

I/We hereby declare that the details furnished above are true and correct to the best of my our knowledge and beliefand I/We undertake to inform you of any changes therein immediately. In case any of the above information is foundto be false or untrue or misleading or misrepresenting I am / We are aware that I / We may be held liable for it

Authorised Signatory (with company seal)

Name :

Place :

Date :

DOCUMENTARY REQUIREMENTS

Copies of the following documents may be obtained after due verification with the originals thereof

1. Copies of the balance sheet for the last 2 financial years (copies of annual balance sheet to be submitted everyyear)

2. Copy of latest share holding pattern including list of all those holding more than 5% in the share capital of thecompany, duty certified by the company secretary. Wholetime director MD. (copy of updated shareholding patternto be submitted every year)

3. Copies of the Memorandum and Articles of Association in case of a company body incorporate partnership deedin case of a partership firm.

4. Copy of the Resolution of board of directors’ approving participation in equity derivatives debt trading and namingauthorized persons for dealing in securities.

5. Photographs of Partners/Whole time directors, individual promoters holding 5% or more either directly or indirectly,in the shareholding of the company and of persons authorized to deal in securities.

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Annexure 2

Model Agreement between Stock Broker and Client

This agreement is made and executed at this day of 20 between:

Mr./Ms/M/s. , an individual/a sole proprietary concern/a partnership firm/a body corporate,registered/incorporated under the provisions of the Indian Partnership Act, 1932/the Companies Act, 1956, being amember of the Stock Exchange (hereinafter called “the Exchange”), and having his/her/its registeredoffice at (hereinafter called “the stock broker”) which expression shall, unless repugnant to the contextor meaning thereof, be deemed to mean and include himself in the capacity of a trading member while trading in thederivatives segment, his/her heirs, executors, administrators and legal representatives/the partners for the time beingof the said firm, the survivor or survivors of them and their respective heirs, executors, administrators and legalrepresentatives/its successors, as the case may be, of the One Part;

And

Mr./Ms/M/s , an individual/a sole proprietary concern/a partnership firm/a body corporate,registered/incorporated, under theprovisions of the Indian Partnership Act, 1932/the Companies Act, 1956, having his/her/its residence/registered officeat … … … … … … … … … … (hereinafter called “the client”) which expression shall, unless repugnant to the contextor 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 firm, the survivor or survivors of them and their respective heirs, executors,administrators and legal representatives/itssuccessors, as the case may be, of the Other Part;

Whereas the stock broker is registered as the stock broker of the Exchange with SEBI registration number in the Capital Market / Cash Segment and SEBI registration number in the Futures and OptionsSegment.

Whereas the client is desirous of investing/trading in those securitiescontracts/other instruments admitted to dealingson the Exchange asdefined in the Rules, Byelaws and Regulations of the Exchange and circulars issued thereunderfrom time to time.

Whereas the client has satisfied itself of the capacity of the stock broker to deal in securities and/or deal in derivativescontracts and wishes to execute its orders through the stock broker and the client shall from time to time continue tosatisfy itself of such capability of the stock broker beforeexecuting orders through the stock broker.

Whereas the stock broker has satisfied and shall continuously satisfy itself about the genuineness and financialsoundness of the client andinvestment objectives relevant to the services to be provided; and Whereas the stock brokerhas taken steps and shall take steps to make the client aware of the precise nature of the Stock broker’s liability forbusiness to beconducted, including any limitations, the liability and the capacity in which the stock broker acts.

WHEREAS the stock broker and the client agree to be bound by all the Rules, Byelaws and Regulations of the Exchangeand circulars issued thereudner and Rules and Regulations of SEBI and relevant notifications of Government authoritiesas may be in force from time to time.

Now, therefore, in consideration of the mutual understanding as set forth in this agreement, the parties thereto haveagreed to the following terms and conditions:

1. The client agrees to immediately notify the stock broker in writing if there is any change in the information in the‘client registration form’ provided by the client to the stock broker at the time of opening of the account or at anytime thereafter.

2. The stock broker declares that it has brought the contents of the risk disclosure document to the notice of clientand made him aware of the significance of the said document. The client agrees that:

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a. He has read and understood the risks involved in trading on a stock exchange.

b. He shall be wholly responsible for all his investment decisions and trades.

c. The failure of the client to understand the risk involved shall not render a contract as void or voidable andthe client shall be and shall continue to be responsible for all the risks and consequences for entering intotrades in the segments in which the client chose to trade.

d. He is liable to pay applicable initial margins, withholding margins, special margins or such other margins asare considered necessary by the stock broker or the Exchange or as may be directed by SEBI from time totime as applicable to the segment(s) in which the client trades. The stock broker is permitted in its sole andabsolute discretion to collect additional margins (even though not required by the Exchange, Clearing House/Clearing Corporation or SEBI) and the client shall be obliged to pay such margins within the stipulated time.

e. Payment of margins by the client does not necessarily imply complete satisfaction of all dues. In spite ofconsistently having paid margins, the client may, on the closing of its trade, be obliged to pay (or entitled toreceive) such further sums as the contract may dictate/require.

3. The Client agrees to pay to the stock broker brokerage and statutory levies as are prevailing from time to time andas they apply to the Client’s account, transactions and to the services that stock broker renders to the Client. Thestock broker agrees that it shall not charge brokerage more than the maximum brokerage permissible as per therules, regulations and bye-laws of the relevant stock exchange/SEBI.

4. The client agrees to abide by the exposure limits, if any, set by the stock broker or by the Exchange or ClearingCorporation or SEBI from time to time.

5. Without prejudice to the stock broker's other rights (including the right to refer a matter to arbitration), the stockbroker shall be entitled to liquidate/close out all or any of the client's positions for non-payment of margins or otheramounts, outstanding debts, etc. and adjust the proceeds of such liquidation / close out, if any, against the client'sliabilities/ obligations. Any and all losses and financial charges on account of such liquidation/closing-out shall becharged to and borne by the client.

6. The stock broker agrees that the money/securities deposited by the client shall be kept in a separate account,distinct from his/its own account or account of any other client and shall not be used by the stock broker forhimself/itself or for any other client or for any purpose other than the purposes mentioned in SEBI Rules andRegulations circulars/ guidelines/Exchanges Rules/Regulations/Bye-laws and circulars.

7. The client agrees to immediately furnish information to the stock broker in writing, if any winding up petition orinsolvency petition has been filed or any winding up or insolvency order or decree or award is passed against himor if any litigation which may have material bearing on his capacity has been filed against him.

8. The stock broker agrees to inform the client and keep him apprised abouttrading/settlement cycles, delivery/payment schedules, any changes therein from time to time, and it shall be the responsibility in turn of the client tocomply with such schedules/procedures of the relevant stock exchange.

9. In the event of death or insolvency of the client or his/its otherwise becoming incapable of receiving and paying foror delivering or transferring securities which the client has ordered to be bought or sold, stock broker may closeout the transaction of the client and claim losses, if any, against the estate of the client. The client or his successors,heirs and assigns shall be entitled to any surplus which may result there from.

10. The stock broker agrees that it shall co-operate in redressing grievances of theclient in respect of transactionsrouted through it and in removing objections for bad delivery of shares, rectification of bad delivery, etc. in respectof shares and securities delivered/to be delivered or received/to be received by the client.

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11. The stock broker shall continue to be responsible for replacing bad deliveries of the client in accordance withapplicable "Good & bad delivery norms" even after termination of the agreement and shall be entitled to recoverany loss incurred by him in such connection from the client.

12. The stock broker shall ensure due protection to the client regarding client’s rights to dividends, rights or bonusshares, etc. in respect of transactions routed through it and it shall not do anything which is likely to harm theinterest of the client with whom and for whom it may have had transactions in securities.

13. The client and the stock broker agree to refer any claims and/or disputes to arbitration as per the Rules, Byelawsand Regulations of the Exchange and circulars issued thereunder as may be in force from time to time.

14. The stock broker hereby agrees that he shall ensure faster settlement of any arbitration proceedings arising out ofthe transactions entered into between him and the client and that he shall be liable to implement the arbitrationawards made in such proceedings.

15. Information about default in payment/delivery and related aspects by a client shall be brought to the notice of therelevant stock Exchange(s). In case where defaulting client is a corporate entity/partnership/ proprietary firm orany other artificial legal entity, then the name(s) of director(s)/ promoter(s)/Partner(s)/proprietor as the case maybe, shall also be communicated to the relevant stock exchange(s).

16. The stock broker and the client agree to reconcile their accounts at the end of each quarter with reference to allthe settlements where payouts have been declared during the quarter.

17. The stock broker and the client agree to abide by any award passed by the Ombudsman under the SEBI(Ombudsman) Regulations, 2003.

18. The stock broker and the client declare and agree that the transactions executed on the Exchange are subject toRules, Byelaws and Regulations and circulars issued thereunder of the Exchange and all parties to such tradeshall have submitted to the jurisdiction of such court as may be specified by the Byelaws and Regulations of theExchange for the purpose of giving effect to the provisions of the Rules, Byelaws and Regulations of the Exchangeand the circulars issued thereunder.

19. The instructions issued by an authorized representative, if any, of the client shall be binding on the client inaccordance with the letter authorizing the said representative to deal on behalf of the said client.

20. Where the Exchange cancels trade(s) suo moto all such trades including the trade/s done on behalf of the clientshall ipso facto stand cancelled.

21. This agreement shall forthwith terminate; if the stock broker for any reason ceases to be a member of the stockexchange including cessation of membership by reason of the stock broker's default, death, resignation or expulsionor if the certificate issued by the Board is cancelled.

22. The stock broker and the client shall be entitled to terminate this agreement without giving any reasons to theother party, after giving notice in writing of not less than one month to the other parties. Notwithstanding any suchtermination, all rights, liabilities and obligations of the parties arising out of or in respect of transactions enteredinto prior to the termination of this agreement shall continue to subsist and vest in /be binding on the respectiveparties or his / its respective heirs, executors, administrators, legal representatives or successors, as the casemay be.

23. In addition to the specific rights set out in this Agreement, the stock broker andthe client shall be entitled toexercise any other rights which the stock broker or the client may have under the Rules, Bye-laws and Regulationsof the Exchange and circulars issued thereunder or Rules and Regulations of SEBI.

24. Words and expressions which are used in this Agreement, but which are not defined herein shall, unless the

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context otherwise requires, have the same meaning as assigned thereto in the Rules, Byelaws and Regulations ofthe Exchange and circulars issued thereunder.

25. The provisions of this agreement shall always be subject to Government notifications, any rules, regulations,guidelines and circulars issued by SEBI and Rules, Regulations and Bye laws of the relevant stock exchange thatmay be in force from time to time.

26. The stock broker hereby undertakes to maintain the details of the client as mentioned in the client registration formor any other information pertaining to the client in confidence and that it shall not disclose the same to any person/authority except as required under any law/regulatory requirements; Provided however that the stockbroker may so disclose information about its his client to any person or authority with the express permission ofthe client.

This agreement can be altered, amended and /or modified by the parties mutually in writing without derogating fromthe contents of this Agreement. Provided however, if the rights and obligations of the parties hereto arealtered by virtue of change in Rules and regulations of SEBI or Bye-laws, Rules and Regulations of the relevant stockExchange, such changes shall be deemed to have been incorporated herein in modification of the rights and obligationsof the parties mentioned in this agreement.

IN WITNESS THEREOF the parties to the Agreement have caused these presents to be executed as of the day andyear first above written.

The client’s Signature/ : The stock broker’sAuthorised Signatory Signature/Authorised Signatory:

Signed by : Signed by:

Title : Title:

Name of the client : Name of the stock broker :

Witness : Witness :

1. 1.

2. 2.

Note : All references to the specific quantity/rate/fee mentioned in this agreement are subject to change from time totime, as so agreed to in writing between the parties.

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Annexure 3

MODEL TRIPARTITE AGREEMENT BETWEEN STOCK BROKER, SUBBROKER AND CLIENT

This Agreement (hereinafter referred to as “Agreement”) is entered into on this ____ day of ___________ 20__, byand between ________________ (name of the stock broker) (hereinafter referred to as “the stock broker”), a … … …… … ..(type of entity) and having his/its office/registered office at … … … … … … … .(address), which expressionshall, 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 ofthem and their respective heirs, executors, administrators and legal representatives/its successors, as the case maybe, of the One Part;

AND

_____________ (name of the sub-broker) (hereinafter referred to as “the subbroker”), a … … … … … … … (type ofentity) and having his/its office/registered office at … … … … … … (address), which expression shall, unless repugnantto the context or meaning thereof, be deemed to mean and include his/her heirs, executors, administrators and legalrepresentatives/the partners for the time being of the said entity, the survivor or survivors of them and their respectiveheirs, executors, administrators and legal representatives/its successors, as the case may be, of the Second Part;

AND

________________________ (name of the client of the sub-broker) (hereinafter referred to as “the client”), an individual/a … … … … . (type of entity) and having his/its residence/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 ofthem and their respective heirs, executors, administrators and legal representatives/its successors, as the case maybe, of the Third Part;

WHEREAS

1. The stock broker states that it is engaged, in the business of stock broking and is a Memberof________________________ (Name of stock exchange/s), (hereinafter referred to as “the stock exchange”)with SEBI registration Number(s) ____________________________

2. The sub-broker states that :

a) The sub broker is recognized by __________________ {Name of the stock exchange(s)} as a sub-brokeraffiliated to the stock broker of the stock exchange with sub-broker SEBI registration Number (s) … … … …… … … … …

b) The sub-broker is not affiliated to any other member of the same stock exchange,

c) The sub-broker has the necessary infrastructure like adequate office space, equipment and manpower toeffectively discharge his/its activities.

3. The Client is registered with the sub-broker as a client for purpose of availing broking services through the sub-broker affiliated to the stock broker and is desirous of investing/trading in those securities/contracts/other instrumentsadmitted to dealings on the Exchange as defined in the Rules, Byelaws and Regulations of the Exchange andcirculars issued thereunder from time to time. A copy of the Client Registration form is annexed hereto.

4. Whereas the stock broker has satisfied and shall continuously satisfy itself about the genuineness and financialsoundness of the client and investment objectives relevant to the services to be provided; and

5. Whereas the stock broker has taken steps and shall take steps to make the client aware of the precise nature ofthe Stock broker’s/ sub broker’s liability for business to be conducted, including any limitations, the liability and the

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capacity in which the stock broker/ sub broker acts.

NOW THIS AGREEMENT WITNESSETH AND IT IS HEREBY AGREED BY AND BETWEEN STOCK BROKER, SUB-BROKER AND CLIENT AS UNDER:

1. The stock broker and sub broker hereby acknowledge and confirm that the sub-broker is affiliated to the stockbroker and that the sub-broker shall within the scope of the authority given under these presents, be entitled to actas a ‘sub-broker’ within the meaning and subject to SEBI (Stock Brokers and Sub-Brokers) Rules, 1992 and SEBI(Stock Brokers and Sub-Brokers) Regulations 1992 (hereinafter referred to as the said “Rules” and Regulations”respectively) as amended from time to time, for assisting the client in buying, selling or dealing in securitiesthrough the stock broker.

2. The stock broker, the sub-broker and the client agree that they shall abide by all the statutory responsibilities andobligations imposed on them by the rules, regulations and / or any other rules or regulations applicable to thestock brokers, the sub-brokers and the clients in general either framed by SEBI or by the relevant stock exchange/clearing corporation and/or any Government Circulars.

3. The stock broker and the sub broker declare that they have brought the contents of the risk disclosure documentto the notice of client and made him aware of the significance of the said document. The client agrees that:

a. He has read and understood the risks involved in trading on a stock exchange.

b. He shall be wholly responsible for all his investment decisions and trades.

c. The failure of the client to understand the risk involved shall not render a contract as void or voidable and theclient shall be and shall continue to be responsible for all the risks and consequences for entering intotrades in the segments in which the client chose to trade.

d. He is liable to pay applicable initial margins, withholding margins, special margins or such other margins as areconsidered necessary by the stock broker or the Exchange or as may be directed by SEBI from time to time asapplicable to the segment(s) in which the client trades. The stock broker is permitted in its sole and absolutediscretion to collect additional margins (even though not required by the Exchange, Clearing House/ClearingCorporation or SEBI) and the client shall be obliged to pay such margins within the stipulated time.

e. Payment of margins by the client does not necessarily imply complete satisfaction of all dues.In spite ofconsistently having paid margins, the client may, on the closing of its trade, be obliged to pay (or entitled toreceive) such further sums as the contract may dictate/require.

4. The Client agrees to pay to the stock broker brokerage and statutory levies as are prevailing from time to time andas they apply to the Client’s account, transactions and to the services that stock broker \ the sub-broker renders tothe Client. The stock broker agrees that it shall not charge brokerage more than the maximum brokerage permissibleas per the rules, regulations and byelaws of the relevant stock exchange/SEBI.

5. The stock broker and the sub broker agree that they shall co-operate and help each other in redressing grievancesof the client in respect of transactions routed through them and in removing objections for bad delivery of shares,rectification of bad delivery, etc. in respect of shares and securities delivered/to be delivered or received/to bereceived by the clients of subbroker from the member and vice-versa.

6. The stock broker shall continue to be responsible for replacing bad deliveries of the client in accordance withapplicable “Good & bad delivery norms” even after termination of the agreement and shall be entitled to recoverany loss incurred by him in such connection from the client.

7. The stock broker agrees that the money/securities deposited by the client shall be kept in a separate account,distinct from his/its own account or account of any other client and shall not be used by the stock broker forhimself/itself or for any other client or for any purpose other than the purposes mentioned in SEBI Rules and

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Regulations circulars/guidelines/Exchanges Rules/Regulations/Bye-laws and circulars.

8. The stock broker and the sub-broker agree that each of them shall ensure due protection to the client regardingclient’s rights to dividends, rights or bonus shares, etc. in respect of transactions routed through them and theyhall not jointly or severally do anything which is likely to harm the interest of the client with whom and for whomhey may have had transactions in securities.

9. The stock broker agrees to inform the sub-broker/client and keep them apprised about trading/settlement cycles,delivery/payment schedules, any changes therein from time to time, and it shall be the responsibility in turn of theub-broker/client to comply with such schedules/procedures of the relevant stock exchange.

10. The sub broker will provide assistance to stock broker and client to reconcile their accounts at the end of eachquarter with reference to all the settlements where payouts have been declared during the quarter.

11. The stock broker shall issue, individually for each client of his sub broker, contract notes in the format prescribedby the relevant stock exchange. The sub-broker shall render necessary assistance to his client in obtaining thecontract note from the stock broker.

12. The stock broker, the sub-broker and the client agree to abide by any award passed by the Ombudsman under theSEBI (Ombudsman) Regulations, 2003.

13. The client and the stock broker agree to refer any claims and/or disputes to arbitration as per the Rules, Byelawsand Regulations of the Exchange and circulars issued thereunder as may be in force from time to time.

14. The stock broker and the sub-broker hereby agree that they will assist and cooperate with each other in ensuringfaster settlement of any arbitration proceedings arising out of the transactions entered into between them vis-à-visthe client and they shall be jointly or severally liable to implement the arbitration awards made in such proceedings.In case of an award against a sub broker, if the sub broker fails to implement the award, the stock broker shall beliable to implement the same and would be entitled to recover the same from the sub broker.

15. The stock broker and the sub-broker hereby agree that all transactions in securities on behalf of the clients of thesub-broker shall be settled by delivery and/or payment, between the stock broker and the client in accordancewith the provisions of rules, bye-laws and regulations of the relevant stock exchange on which the transactionstook place and subject to the procedures for settlement of transactions laid down by the relevant stock exchangefrom time to time.

16. Information about default in payment/delivery and related aspects by a client, including that of a sub broker as aclient shall be brought to the notice of the relevant stock Exchange(s) by the stock broker. In case where defaultingsub broker/client is a corporate entity/partnership/proprietary firm or any other artificial legal entity, then the name(s)of director(s)/promoter(s)/Partner(s)/proprietor as the case may be, shall also be communicated to the relevantstock exchange(s) by the stock broker.

17. The stock broker, the sub-broker or the client shall be entitled to terminate this agreement without giving anyreasons to the other party, after giving notice in writing of not less than one month to the other parties at theirrespective addresses mentioned below. Notwithstanding any such termination, all rights, liabilities and obligationsof the parties arising out of or in respect of transactions entered into prior to the termination of this agreement shallcontinue to subsist and vest in /be binding on the respective parties or his / its respective heirs, executors,administrators, legal representatives or successors, as the case may be.

18. In the event of sub broker terminating this agreement and/or\ termination of the agreement with the sub broker bythe stock broker, for any reason whatsoever, the client shall be informed of such termination and the client shall bedeemed to be the direct client of the stock broker and all clauses in the agreement governing the client and stockbroker shall continue to be in force as it is, unless the client intimates to the stock broker his/its intention toterminate the agreement by giving a notice in writing of not less than one month.

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19. This agreement shall forthwith terminate;

(i) if the stock broker for any reason ceases to be a member of the stockexchange including cessation ofmembership by reason of the stock broker’s default, death, resignation or expulsion or if the certificateissued by the Board is cancelled;

(ii) 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. Provided however, in such an event, theclient shall be informed of such termination and the client shall be deemed to be the direct client of the stockbroker and all clauses in the agreement governing the client and stock broker shall continue to be in forceas it is, unless the client intimate to the stock broker or the stock broker intimates to the client his/itsintention to terminate the agreement by giving one month notice in writing.

20. The provisions of this agreement shall always be subject to Government notifications, any rules, regulations,guidelines and circulars issued by SEBI and Rules, Regulations and Bye laws of the relevant stock exchange thatmay be in force from time to time.

21. In the event of death or insolvency of the client or his/its otherwise becoming incapable of receiving and paying foror delivering or transferring securities which the client has ordered to be bought or sold, stock broker may closeout the transaction of the client and claim losses, if any, against the estate of the client. The client or his successors,heirs and assigns shall be entitled to any surplus which may result therefrom.

22. Without prejudice to the stock broker’s other rights (including the right to refer a matter to arbitration), the stockbroker shall be entitled to liquidate/close out all or any of the client’s positions for non-payment of margins or otheramounts, outstanding debts, etc. and adjust the proceeds of such liquidation / close out, if any, against the client’sliabilities/ obligations. Any and all losses and financial charges on account of such liquidation/closing-out shall becharged to and borne by the client.

23. The stock broker and the client declare and agree that the transactions executed on the Exchange are subject toRules, Byelaws and Regulations and circulars issued thereunder of the Exchange and all parties to such tradeshall have submitted to the jurisdiction of such court as may be specified by the Byelaws and Regulations of theExchange for the purpose of giving effect to the provisions of the Rules, Byelaws and Regulations of the Exchangeand the circulars issued thereunder.

24. Where the Exchange cancels trade(s) suo moto all such trades including the trade/s done on behalf of the clientshall ipso facto stand cancelled, member shall be entitled to cancel the respective contract(s) with client(s)

25. The instructions issued by an authorized representative, if any, of the client shall be binding on the client inaccordance with the letter authorizing the said representative to deal on behalf of the said client.

26. The client agrees to immediately notify the stock broker/sub broker in writing if there is any change in the informationin the ‘client registration form’ provided by the client to the stock broker/sub broker at the time of opening of theaccount or at any time thereafter.

27. The client agrees to abide by the exposure limits, if any, set by the stock broker or by the Exchange or ClearingCorporation or SEBI from time to time.

28. In addition to the specific rights set out in this Agreement, the stock broker, the sub-broker and the client shall beentitled to exercise any other rights which the stock broker, sub broker or the client may have under the Rules,Bye-laws and Regulations of the Exchange and circulars issued thereunder or Rules and Regulations of SEBI.

29. The stock broker and the sub-broker hereby undertake to maintain the details of the client as mentioned in theclient registration form or any other information pertaining to the client in confidence and that they shall notdisclose the same to any person/authority except as required under any law/regulatory requirements: Provided

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however that the stock broker or subbroker may so disclose information about his client to any person or authoritywith the express permission of the client.

30. The client agrees to immediately furnish information to the stock broker in writing, if any winding up petition orinsolvency petition has been filed or any winding up or insolvency order or decree or award is passed against himor if any litigation which may have material bearing on his capacity has been filed against him.

31. Words and expressions which are used in this Agreement, but which are not defined herein shall, unless thecontext otherwise requires, have the same meaning as assigned thereto in the Rules, Byelaws and Regulations ofthe Exchange and circulars issued thereunder.

This agreement can be altered, amended and / or modified by the parties mutually in writing without derogating fromthe contents of this Agreement. Provided however, if the rights and obligations of the parties hereto are altered byvirtue of change in Rules and regulations of SEBI or Bye-laws, Rules and Regulations of the relevant stock Exchange,such changes shall be deemed to have been incorporated herein in modification of the rights and obligations of theparties mentioned in this agreement.

IN WITNESS WHEREOF, the parties hereto have set their hands and signatures on the day, month and year firstabove written Signed for and on behalf of the member, the sub-broker and the client

Full name and details ofrecognition of the stockexchange and address

Full details andaddress

(Full name details ofmembership of the

stock exchange andaddress)

Member Sub-broker Client

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Annexure 4

COMBINED RISK DISCLOSURE DOCUMENT FOR CAPITAL MARKET/CASH SEGMENT AND FUTURES &OPTIONS SEGMENT (TO BE GIVEN BY THE BROKER TO THE CLIENT)

This document is issued by the member of the National Stock Exchange of India (hereinafter referred to as “NSE”) /The Stock Exchange, Mumbai (hereinafter referred to as “BSE”) which has been formulated by the Exchanges incoordination with the Securities and Exchange Board of India (hereinafter referred to as “SEBI”) and contains importantinformation on trading in Equities and F&O Segments of NSE / BSE. All prospective constituents should read thisdocument before trading on Capital Market/Cash Segment or F&O segment of the Exchanges.

NSE/BSE/SEBI does neither singly or jointly and expressly nor impliedly guarantee nor make any representationconcerning the completeness, the adequacy or accuracy of this disclosure document nor has NSE/BSE/SEBI endorsedor passed any merits of participating in the trading segments. This brief statement does not disclose all the risks andother significant aspects of trading.

In the light of the risks involved, you should undertake transactions only if you understand the nature of the contractualrelationship into which you are entering and the extent of your exposure to risk.

You must know and appreciate that investment in Equity shares, derivative or other instruments traded on the StockExchange(s), which have varying element of risk, is generally not an appropriate avenue for someone of limitedresources/limited investment and/or trading experience and low risk tolerance. You should therefore carefully considerwhether such trading is suitable for you in the light of your financial condition. In case you trade on NSE/BSE andsuffer adverse consequences or loss, you shall be solely responsible for the same and NSE/BSE, its ClearingCorporation/Clearing House and/or SEBI shall not be responsible, in any manner whatsoever, for the same and it willnot be open for you to take a plea that no adequate disclosure regarding the risks involved was made or that youwere not explained the full risk involved by the concerned member. The constituent shall be solely responsible for theconsequences and no contract can be rescinded on that account. You must acknowledge and accept that there canbe no guarantee of profits or no exception from losses while executing orders for purchase and/or sale of a security orderivative being traded on NSE/BSE.

It must be clearly understood by you that your dealings on NSE/BSE through a member shall be subject to your fulfillingcertain formalities set out by the member, which may interalia include your filling the know your client form, clientregistration form, execution of an agreement, etc., and are subject to the Rules,

Byelaws and Regulations of NSE/BSE and its Clearing Corporation, guidelines prescribed by SEBI and in force fromtime to time and Circulars as may be issued by NSE/BSE or its Clearing Corporation/Clearing House and in forcefrom time to time.

NSE/BSE does not provide or purport to provide any advice and shall not be liable to any person who enters into anybusiness relationship with any trading member and/or sub-broker of NSE/BSE and/or any third party based on anyinformation contained in this document. Any information contained in this document must not be construed as businessadvice/investment advice. No consideration to trade should be made without thoroughly understanding and reviewingthe risks involved in such trading. If you are unsure, you must seek professional advice on the same.

In considering whether to trade or authorize someone to trade for you, you should be aware of or must get acquaintedwith the following:-

1. BASIC RISKS INVOVLED IN TRADING ON THE STOCK EXCHANGE (EQUITY AND OTHER INSTRUMENTS)

1.1 Risk of Higher Volatility:

Volatility refers to the dynamic changes in price that securities undergo when trading activity continues on theStock Exchange. Generally, higher the volatility of a security/contract, greater is its price swings. There may benormally greater volatility in thinly traded securities/contracts than in active securities/contracts. As a result ofvolatility, your order may only be partially executed or not executed at all, or the price at which your order got

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executed may be substantially different from the last traded price or change substantially thereafter, resulting innotional or real losses.

1.2 Risk of Lower Liquidity:

Liquidity refers to the ability of market participants to buy and/or sell securities / contracts expeditiously at acompetitive price and with minimal price difference. Generally, it is assumed that more the numbers of ordersavailable in a market, greater is the liquidity. Liquidity is important because with greater liquidity, it is easier forinvestors to buy and/or sell securities / contracts swiftly and with minimal price difference, and as a result, investorsare more likely to pay or receive a competitive price for securities / contracts purchased or sold. There may be arisk of lower liquidity in some securities / contracts as compared to active securities / contracts. As a result, yourorder may only be partially executed, or may be executed with relatively greater price difference or may not beexecuted at all.

1.2.1 Buying/selling without intention of giving and/or taking delivery of a security, as part of a day trading strategy, mayalso result into losses, because in such a situation, stocks may have to be sold/purchased at a low/high prices,compared to the expected price levels, so as not to have any obligation to deliver/receive a security.

1.3 Risk of Wider Spreads:

Spread refers to the difference in best buy price and best sell price. It represents the differential between the priceof buying a security and immediately selling it or vice versa. Lower liquidity and higher volatility may result in widerthan normal spreads for less liquid or illiquid securities / contracts. This in turn will hamper better price formation.

1.4 Risk-reducing orders:

Most Exchanges have a facility for investors to place “limit orders”, “stop loss orders” etc”. The placing of suchorders (e.g., “stop loss” orders, or “limit” orders) which are intended to limit losses to certain amounts may not beeffective many a time because rapid movement in market conditions may make it impossible to execute suchorders.

1.4.1 A “market” order will be executed promptly, subject to availability of orders on opposite side, without regard toprice and that, while the customer may receive a prompt execution of a “market” order, the execution may be atavailable prices of outstanding orders, which satisfy the order quantity, on price time priority. It may be understoodthat these prices may be significantly different from the last traded price or the best price in that security.

1.4.2 A “limit” order will be executed only at the “limit” price specified for the order or a better price. However, while thecustomer receives price protection, there is a possibility that the order may not be executed at all.

1.4.3 A stop loss order is generally placed “away” from the current price of a stock / contract, and such order getsactivated if and when the stock / contract reaches, or trades through, the stop price. Sell stop orders are enteredordinarily below the current price, and buy stop orders are entered ordinarily above the current price. When thestock reaches the pre-determined price, or trades through such price, the stop loss order converts to a market/limit order and is executed at the limit or better. There is no assurance therefore that the limit order will beexecutable since a stock / contract might penetrate the pre-determined price, in which case, the risk of such ordernot getting executed arises, just as with a regular limit order.

1.5 Risk of News Announcements:

Issuers make news announcements that may impact the price of the securities / contracts. These announcementsmay occur during trading, and when combined with lower liquidity and higher volatility, may suddenly cause anunexpected positive or negative movement in the price of the security / contract.

1.6 Risk of Rumours:

Rumours about companies at times float in the market through word of mouth, newspapers, websites or newsagencies, etc. The investors should be wary of and should desist from acting on rumours.

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1.7 System Risk:

High volume trading will frequently occur at the market opening and before market close. Such high volumes mayalso occur at any point in the day. These may cause delays in order execution or confirmation.

1.7.1 During periods of volatility, on account of market participants continuously modifying their order quantity or pricesor placing fresh orders, there may be delays in order execution and its confirmations.

1.7.2 Under certain market conditions, it may be difficult or impossible to liquidate a position in the market at a reasonableprice or at all, when there are no outstanding orders either on the buy side or the sell side, or if trading is halted ina security due to any action on account of unusual trading activity or stock hitting circuit filters or for any otherreason.

1.8 System/Network Congestion:

Trading on NSE/BSE is in electronic mode, based on satellite/leased line based communications, combination oftechnologies and computer systems to place and route orders. Thus, there exists a possibility of communicationfailure or system problems or slow or delayed response from system or trading halt, or any such other problem/glitch whereby not being able to establish access to the trading system/network, which may be beyond the controlof and may result in delay in processing or not processing buy or sell orders either in part or in full. You arecautioned to note that although these problems may be temporary in nature, but when you have outstanding openpositions or unexecuted orders, these represent a risk because of your obligations to settle all executed transactions.

2. As far as Futures and Options segment is concerned, please note and get yourself acquainted with the followingadditional features:-

2.1 Effect of “Leverage” or “Gearing”

The amount of margin is small relative to the value of the derivatives contract so the transactions are ‘leveraged’or ‘geared’. Derivatives trading, which is conducted with a relatively small amount of margin, provides the possibilityof great profit or loss in comparison with the principal investment amount. But transactions in derivatives carry ahigh degree of risk.

You should therefore completely understand the following statements before actually trading in derivatives tradingand also trade with caution while taking into account one’s circumstances, financial resources, etc. If the pricesmove against you, you may lose a part of or whole margin equivalent to the principal investment amount in arelatively short period of time. Moreover, the loss may exceed the original margin amount.

A. Futures trading involves daily settlement of all positions. Every day the open positions are marked to marketbased on the closing level of the index. If the index has moved against you, you will be required to deposit theamount of loss (notional) resulting from such movement. This margin will have to be paid within a stipulated timeframe, generally before commencement of trading next day.

B. If you fail to deposit the additional margin by the deadline or if an outstanding debt occurs in your account, thebroker/member may liquidate a part of or the whole position or substitute securities. In this case, you will be liablefor any losses incurred due to such close-outs.

C. Under certain market conditions, an investor may find it difficult or impossible to execute transactions. For example,this situation can occur due to factors such as illiquidity i.e. when there are insufficient bids or offers or suspensionof trading due to price limit or circuit breakers etc.

D. In order to maintain market stability, the following steps may be adopted: changes in the margin rate, increases inthe cash margin rate or others. These new measures may also be applied to the existing open interests. In suchconditions, you will be required to put up additional margins or reduce your positions.

E. You must ask your broker to provide the full details of the derivatives contracts you plan to trade i.e. the contractspecifications and the associated obligations.

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2.2. Risk of Option holders

1. An option holder runs the risk of losing the entire amount paid for the option in a relatively short period of time. Thisrisk reflects the nature of an option as a wasting asset which becomes worthless when it expires. An option holderwho neither sells his option in the secondary market nor exercises it prior to its expiration will necessarily lose hisentire investment in the option. If the price of the underlying does not change in the anticipated direction before theoption expires to an extent sufficient to cover the cost of the option, the investor may lose all or a significant partof his investment in the option.

2. The Exchange may impose exercise restrictions and have absolute authority to restrict the exercise of options atcertain times in specified circumstances.

2.3 Risks of Option Writers

1. If the price movement of the underlying is not in the anticipated direction, the option writer runs the risks of losingsubstantial amount.

2. The risk of being an option writer may be reduced by the purchase of other options on the same underlyinginterest and thereby assuming a spread position or by acquiring other types of hedging positions in the optionsmarkets or other markets. However, even where the writer has assumed a spread or other hedging position, therisks may still be significant. A spread position is not necessarily less risky than a simple ‘long’ or ‘short’ position.

3. Transactions that involve buying and writing multiple options in combination, or buying or writing options incombination with buying or selling short the underlying interests, present additional risks to investors. Combinationtransactions, such as option spreads, are more complex than buying or writing a single option. And it should befurther noted that, as in any area of investing, a complexity not well understood is, in itself, a risk factor. While thisis not to suggest that combination strategies should not be considered, it is advisable, as is the case with allinvestments in options, to consult with someone who is experienced and knowledgeable with respect to the risksand potential rewards of combination transactions under various market circumstances.

3. GENERAL

3.1 Commission and other charges

Before you begin to trade, you should obtain a clear explanation of all commission, fees and other charges forwhich you will be liable. These charges will affect your net profit (if any) or increase your loss.

3.2 Deposited cash and property

You should familiarise yourself with the protections accorded to the money or other property you deposit particularlyin the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property maybe governed by specific legislation or local rules. In some jurisdictions, property which has been specificallyidentifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event ofa shortfall. In case of any dispute with the member, the same shall be subject to arbitration as per the byelaws/regulations of the Exchange.

3.3 For rights and obligations of the clients, please refer to Annexure-1 enclosed with this document.

3.4 The term ‘constituent’ shall mean and include a client, a customer or an investor, who deals with a member for thepurpose of acquiring and/or selling of securities through the mechanism provided by NSE/BSE.

3.5 The term ‘member’ shall mean and include a trading member, a broker or a stock broker, who has been admittedas such by NSE/BSE and who holds a registration certificate as a stock broker from SEBI.

I hereby acknowledge that I have received and understood this risk disclosure statement and Annexure-1 containingmy rights and obligations.

Customer Signature (If Partner, Corporate, or other Signatory, then attest with company seal.)

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ANNEXURE-1

INVESTORS’ RIGHTS AND OBLIGATIONS :

1.1 You should familiarise yourself with the protection accorded to the money or other property you may deposit withyour member, particularly in the event of a default in the stock market or the broking firm’s insolvency or bankruptcy.

1.1.1 Please ensure that you have a documentary proof of your having made deposit of such money or property with themember, stating towards which account such money or property deposited.

1.1.2 Further, it may be noted that the extent to which you may recover such money or property may be governed by theBye-laws and Regulations of NSE/BSE and the scheme of the Investors’ Protection Fund in force from time totime.

1.1.3 Any dispute with the member with respect to deposits, margin money, etc., and producing an appropriate proofthereof, shall be subject to arbitration as per the Rules, Byelaws/Regulations of NSE/BSE or its Clearing Corporation/ Clearing House.

1.2 Before you begin to trade, you should obtain a clear idea from your member of all brokerage, commissions, feesand other charges which will be levied on you for trading. These charges will affect your net cash inflow or outflow.

1.3 You should exercise due diligence and comply with the following requirements of the NSE/BSE and/or SEBI:

1.3.1 Please deal only with and through SEBI registered members of the Stock Exchange and are enabled to trade onthe Exchange. All SEBI registered members are given a registration no., which may be verified from SEBI. Thedetails of all members of NSE/BSE and whether they are enabled to trade may be verified from NSE/BSE website(www.nseindia.com / www.bseindia.com).

1.3.2 Demand any such information, details and documents from the member, for the purpose of verification, as you mayfind it necessary to satisfy yourself about his credentials.

1.3.3 Furnish all such details in full as are required by the member as required in “Know Your Client” form, which mayalso include details of PAN or Passport or Driving Licence or Voters Id, or Ration Card, bank account and depositoryaccount, or any such details made mandatory by SEBI/NSE at any time, as is available with the investor.

1.3.4 Execute a broker-client agreement in the form prescribed by SEBI and/or the Relevant Authority of NSE or itsClearing Corporation / Clearing House from time to time, because this may be useful as a proof of your dealingarrangements with the member.

1.3.5 Give any order for buy or sell of a security in writing or in such form or manner, as may be mutually agreed. Givinginstructions in writing ensures that you have proof of your intent, in case of disputes with the member.

1.3.6 Ensure that a contract note is issued to you by the member which contains minute records of every transaction.Verify that the contract note contains details of order no., trade number, trade time, trade price, trade quantity,name of security, client code allotted to you and showing the brokerage separately. Contract notes are required tobe given/sent by the member to the investors latest on the next working day of the trade. Contract note can beissued by the member either in electronic form using digital signature as required, or in hard copy. In case you donot receive a contract note on the next working day or at a mutually agreed time, please get in touch with theInvestors Grievance Cell of NSE/BSE, without delaying.

1.3.7 Facility of Trade Verification is available on NSE/BSE website (www.nseindia.com / www.bseindia.com), wheredetails of trade as mentioned in the contract note may be verified from the trade date upto five trading days.Where trade details on the website, do not tally with the details mentioned in the contract note, immediately get intouch with the Investors Grievance Cell of NSE/BSE.

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1.3.8 Ensure that payment/delivery of securities against settlement is given to the concerned member within one workingday prior to the date of pay-in announced by NSE/BSE or it’s Clearing Corporation / Clearing House. Paymentsshould be made only by account payee cheque in favour of the firm/company of the trading member and a receiptor acknowledgement towards what such payment is made be obtained from the member. Delivery of securities ismade to the pool account of the member rather than to the beneficiary account of the member.

1.3.9 In case pay-out of money and/or securities is not received on the next working day after date of pay-out announcedby NSE/BSE or its Clearing Corporation / Clearing House, please follow-up with the concerned member for itsrelease. In case pay-out is not released as above from the member within five working days, ensure that youlodge a complaint immediately with the Investors’ Grievance Cell of NSE/BSE.

1.3.10 Every member is required to send a complete ‘Statement of Accounts’, for both funds and securities settlement toeach of its constituents, at such periodicity as may be prescribed by time to time. You should report errors, if any,in the Statement immediately, but not later than 30 calendar days of receipt thereof, to the member. In case theerror is not rectified or there is a dispute, ensure that you refer such matter to the Investors Grievance Cell of NSE/BSE, without delaying.

1.3.11 In case of a complaint against a member/registered sub-broker, you should address the complaint to the Office asmay be specified by NSE/BSE from time to time.

1.4 In case where a member surrenders his membership, NSE/BSE gives a public notice inviting claims, if any, frominvestors. In case of a claim, relating to “transactions executed on the trading system” of NSE/BSE, ensure thatyou lodge a claim with NSE/BSE/NSCCL/Clearing House within the stipulated period and with the supportingdocuments.

1.5 In case where a member is expelled from trading membership or declared a defaulter, NSE/BSE gives a publicnotice inviting claims, if any, from investors. In case of a claim, relating to “transactions executed on the tradingsystem” of NSE/BSE, ensure that you lodge a claim with NSE/BSE within the stipulated period and with thesupporting documents.

1.6 Claims against a defaulter/expelled member found to be valid as prescribed in the relevant Rules/Bye-laws andthe scheme under the Investors’ Protection Fund (IPF) may be payable first out of the amount vested in theCommittee for Settlement of Claims against Defaulters, on pro-rata basis if the amount is inadequate. The balanceamount of claims, if any, to a maximum amount of Rs.10 lakhs per investor claim, per defaulter/expelled membermay be payable subject to such claims being found payable under the scheme of the IPF.

Notes :

1. The term ‘constituent’ shall mean and include a client, a customer or an investor, who deals with a trading memberof NSE/BSE for the purpose of acquiring and / or selling of securities through the mechanism provided by NSE/BSE.

2. The term ‘member’ shall mean and include a member or a broker or a stock broker, who has been admitted assuch by NSE/BSE and who holds a registration certificate as a stock broker from SEBI.

3. NSE/BSE may be substituted with names of the relevant exchanges, wherever applicable.

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ANNEXURE 5

MODEL 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”) andhaving his/its office/registered office at (address), which expression shall, unless repugnant tothe context or meaning thereof, be deemed to mean and include his/her heirs, executors, administrators and legalrepresentatives/the partners for the time being of the said entity, the survivor or survivors of them and their respectiveheirs, 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, bedeemed to mean and include his/her heirs, executors, administrators and legal representatives/the partners for thetime being of the said entity, the survivor or survivors of them and their respective heirs, executors, administrators andlegal 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 “thesaid exchange”} and also holds a certificate of registration granted under Rule 4 of the Securities and Exchange Boardof India (Stock Brokers and Sub-Brokers) Rules, 1992 (hereinafter referred to as “the said Rules) & the Securities andExchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 (hereinafter referred to as “the saidRegulations”); bearing SEBI Registration Number.

AND

WHEREAS the sub-broker is desirous of affiliating to the stock broker and is hereby eligible for making an applicationfor seeking recognition of the stock exchange and for grant of a certificate of registration under rule 5 of the saidrules;

WHEREAS in terms of item (C) (4) the Code of Conduct for sub brokers prescribed under of Schedule II read withregulation 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 eachother specifying the scope of their authority & responsibility, in relation to the business of dealing in securities betweenthem; 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 thanthe said exchange:

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 andregistration with SEBI.

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

Name of theaffiliated stock

broker

Name of thestock exchange

SEBI Registrationnumber of the stock

broker

SEBI Registrationnumber of the sub

broker

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

Note 1: A Sub-broker is deemed to have direct/indirect interest in other Sub-broker (Stock Broker) for purposes of thisclause, 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 relativebeing partner in a Sub-Broking firm (Stock Broking Firm), he or any of his relative being a director in a Sub-brokingCompany (Stock Broking Company) or he or any of his relatives clubbed together holding substantial equity in anySub-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 ordescendent of an individual.

NOW THEREFORE this agreement witnesseth as follows:

1. The stock broker and the sub broker hereby acknowledge and confirm that the subbroker is affiliated to the stockbroker and that the sub-broker shall within the scope of the authority given under these presents, be entitled to actas 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 amendedfrom 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 commencebusiness only after receipt of registration certificate from SEBI, continue business during currency of the certificateand 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 thelatter’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 excessof 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 theirmutual understanding. Provided however, the brokerage/commission payable to the sub-broker shall not exceedone 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 securitiesentered into on behalf of the individual client’s dealing, with bifurcation showing the details by each of the subbrokers.

Name & SEBI Reg.No. of Broker(s)

directly or indirectlyrelated to the

subbroker

Name & SEBI Reg.No. of sub broker(s)directly or indirectlyrelated to the sub

broker

Name & SEBIReg. No. of

broker(s) withwhom the sub

broker mentionedat column (2) is

affiliated

Name ofthe stockexchange

Nature ofinterest (i.e. as

director orshareholder)

Also state % ofshareholding

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7. If any dispute arises between the stock broker and the sub-broker, the same shall as far as possible be settledwith the help of the officials of the said exchange and if no such settlement is possible the parties hereby agree torefer 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 andprovide all relevant documents in their possession or control so as to expedite the settlement or adjudicationthrough arbitration process.

8. The sub-broker shall inform the stock broker of any proposed material change in its status and constitution, beforeseeking prior approval for the same from SEBI.

9. The stock broker and the sub-broker shall be entitled to terminate this agreement without giving any reasons tothe other party after giving notice in writing of not less than one month to the other party at its respective addressmentioned below.

Provided however that, in the event of the sub broker terminating the agreement and/or termination of the subbroker by the stock broker, for any reason whatsoever, all his clients shall be deemed to be the direct clients of thestock broker and all clauses in the tripartite agreement between the stock broker, the sub broker and client governingthe client and stock broker shall continue to be in force as it is, unless any client intimates to the stock broker or thestock broker intimates to the client his/its intention to terminate the agreement by giving a notice in writing of notless than one month.

10. Where the stock broker has terminated his/its agreement with the sub broker, the stock broker shall inform therelevant stock exchange (s).

11. This agreement shall forthwith stand terminated;

(i) if the stock broker for any reason ceases to be a member of the stock exchange including by cessation of membershipby reason of the stock broker’s, death, resignation, expulsion or having being declared a defaulter or if the certificateissued by the Board is cancelled;

(ii) upon the demise/insolvency of the sub-broker or the cancellation of his/its registration with the Board or /withdrawalof recognition of the sub-broker by the stock exchange.

12. On termination of the agreement by the stock broker, it shall be the duty of the stock broker to collect and forwardthe registration certificate of the sub-broker to SEBI through the stock exchange along with all the fees in arrearsin respect of the subbroker’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 saidduty.

13. In the event of surrender of the sub broker registration, the affiliating broker shall ensure that investors/generalpublic are informed about surrender of registration of the sub broker. A public advertisement to that effect shall berequired to be issued by the stock broker in a local newspaper where the sub broker’s Registered office, HeadOffice/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 firstabove written

Signed for and on behalf of Signed for and on behalf of

Stock Broker : Sub-Broker :

By : By :

Signature : Signature :

Title : Title :

Witness : Witness :

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Notice no : 20061120-9Notice date : Monday, November 20, 2006Subject : Client Registration Form / Know Your Client FormSegment Name : General

CONTENTS :

Attention of the trading members is drawn to SEBI circular number SEBI/MIRSD/DPS-1/Cir-31/2004 dated 26th August2004, Exchange Notice No. 20040827-11 dated August 27, 2004, Exchange Notice No.20060303-20 dated March 3,2006 and Exchange Notice No.20060704-5 dated July 4, 2006 issued in respect of the above subject.

The trading members were advised to ensure that all client registration details as mentioned in the Client RegistrationForm / Know Your Client (KYC) form are complete in all respect and are reviewed and updated periodically. The tradingmembers were also advised to ensure that Client Registration details including financial details of the clients shouldbe correctly obtained and updated periodically. Trading members were also advised to monitor the trading activities oftheir clients based on the financial details as contained in the client's KYC.

It has been observed that client registration details including financial details, mentioned in the KYC's are incomplete/incorrect/not updated. The trading members are therefore, once again reminded to ensure that Client Registrationdetails including financial details of the clients should be complete in all respect, and updated periodically.

Further, trading members are requested to note that a penalty of Rs. 2,500/- per client shall be levied for ClientRegistration forms obtained without material information and a penalty of Rs. 10,000/- shall be levied for ClientRegistration Forms not complete/ not supported by documents in case of multiple instances as per the Exchange NoticeNo. 20060602-7 dated June 2, 2006.

P. K. Ramesh Yogesh BambardekarGeneral Manager ManagerSurveillance and Supervision Surveillance and Supervision

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Notice no : 20060704-6Notice date : Tuesday, July 04, 2006Subject : Uniform Client Registration DocumentsSegment Name : General

CONTENTS :

As the trading members are aware, SEBI vide circular number SEBI/MIRSD/DPS-I/Cir-31/2004 dated August 26, 2004has prescribed uniform document requirement for trading. As required by SEBI, the circular along with its annexurespertaining to clients containing the model formats of uniform set of documents namely (a) Client Registration Form (b)Member Client Agreements (c) Tripartite agreement between broker-sub broker and clients wherever applicable and(d) Risk Disclosure documents was forwarded by the Exchange for compliance by the trading members.

Attention of the trading members is drawn specifically to paragraph 3 of the said circular which states that the stockbroker may incorporate any additional clauses in these documents provided these are not in conflict with any of theclauses in the model document, as also the Rules, Regulations, Articles, Byelaws, Circulars, directives and guidelines.Moreover, the trading member may also seek additional information so as to satisfy himself about the antecedents ofthe client.

As a matter of abundant caution, attention of the trading members is once again brought to the above circular. Tradingmembers are further advised to ensure the following:

(1) At the time of registering a client, the client shall be informed in writing that only the documents stated above aremandatory and any additional clause or documentation shall be voluntary and at the discretion of member and client.

(2) Additional documents shall state at the beginning in bold that the document is voluntary.

(3) However, if such documents are required in order to ensure smooth functioning of special facility such as internettrading offered by the trading member, the client shall be informed in writing clearly that such documents arevoluntary and the client need not execute such documents if he/she does not wish to use that facility.

(4) Such documents, if any shall also recognize specifically the right of the client to terminate the document. In suchan eventuality, the trading member may terminate the special facility.

(5) The docket or folder containing draft mandatory documents for signing and the checklist containing mandatorydocuments shall not include draft voluntary documentations, if any. Further, These mandatory documents shouldrelate to only opening the account for stock trading and not for any other additional business/activity like openingof Bank Account, DP Account etc.

(6) No documentation shall give any exclusive right or control to the trading member or third party over the demataccount or ledger account or bank account of the client except to the extent of and restricted to the client (includingfamily members who have given authorization) obligation to the trading member in respect of the transactionsdone or to be done (like upfront margin) by the trading member on behalf of the client on the Exchange.

In case of any queries/ clarification, trading members may contact the under mentioned officials:

NAME INTERCOM NO.

Mr. Pankaj Gupta 8120

Mr. Nitesh Agarwal 8354

Ms. Amita Tarwale 8262

Ms. Shaila Valsan 8316

P.K.Ramesh Pankaj GuptaDy.General Manager Asst.General ManagerSurveillance & Supervision Surveillance & Supervision

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Notice no : 20031125-7Notice date : Tuesday, November 25, 2003Subject : Disclosure of Proprietary Trading by Broker to ClientSegment Name : General

CONTENTS :

Members are hereby informed that SEBI, vide letter Ref.SEBI/MRD/SE/Cir-42/2003 dated November 19, 2003, hasdirected every broker to disclose to his client whether he does client-based business or proprietary trading as well.Themember shall disclose the aforesaid information to his existing clients within a period of one month from the date ofthis circular.Further, the broker shall disclose this information upfront to his new clients at the time of entering into the“Know Your Client” Agreement.In case a broker does not presently trade on proprietary account but chooses to do soat a later date, he shall be required to disclose this to his clients before carrying out any proprietary trading.The abovementioned SEBI Circular is attached herewith and members are requested to comply with the same.

Kevin DesouzaChief General ManagerMembership & Inspection

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Notice no : 2628/97

NOTICE

In the annual meeting of representative of all Stock Exchanges organised by Securities and Exchange Board of India(SEBI) on 19th March, 1997, it was decided that efforts should be made to revive the institution of remisier under theRules and Bye-laws of Stock Exchanges. A remisier is a person who is engaged by the member primarily to solicitbusiness in securities on commission basis. The relevant Rules of the Exchange (namely, Rule 216 to Rule 235)regarding appointment and regulation of remisiers are enclosed as Annexure I.

2. The Governing Board of the Exchange in its meeting held on 26th May, 1997 prescribed the application form to befilled in by a member desirous of employing a remisier. Copy of the application form is enclosed as Annexure – II.The application form would be available with the membership department of the Exchange. The members maycontact the following persons for application forms and other information.

Name Intercom No.

1. Shri Deepak Agarwal 8307

2. Shri Kamlesh Shah 8018

3. Shri Zubin Kanga 8024

3. Members may also note that the following conditions have also been stipulated for remisiers by the GoverningBoard :

(i) A remisier shall pay a one time non-refundable registration fee of Rs.5,000/- at the time of every fresh registration.

(ii) A remisier shall have a minimum qualification of H.S.C. or old Matriculation. However, the Exchange may, inexceptional circumstances, waive this requirement based on the market experience of the remisier.

(iii) A remisier can be registered only with one member. However, there would be no limit on the number of remisiersto be appointed by a member.

(iv) A remisier should not be an employee of any individual or any organization.

(v) A remisier shall not be or act as a sub broker anywhere so long as he continues as a remisier.

(vi) Any dispute between the member and his remisier relating to or arising out of any transactions done on theExchange, will be subject to arbitration as provided in the Rules, Bye-laws and Regulations of the Exchange.

The application duly filled in the prescribed forms may be forwarded to the Exchange along with a cheque for Rs.5,000/- (Rupees Five Thousand Only) per application, drawn in favour of “The Stock Exchange, Mumbai”.

Members are also advised to study the letter of date relating to remisier issued by the President of the Exchange.

A. A. TirodkarDirector – Finance & SecretaryThursday, 9th June, 1997

141

Extract of Bye-Law 218

With whom brokerage may be shared

218 (a) A member may share brokerage as provided in sub-clause (b) with a remisier, authorised clerk or employee inhis own exclusive employment. He may similarly share brokerage with any other person introducing a constituentprovided such person –

(i) is not one for whom members are forbidden to do business under the Rukes, Bye-Laws and Regulationsof the Exchange;

(ii) is not a remisier, authorised clerk or employee in the employment of another member;

(iii) does not advertise in the public press or in any other manner that he is acting as a broker;

(iv) does not act as broker within a distance of fifty miles of the city of Bombay;

(v) does not pass contracts in his own name or issue price lists or pamphlets or circulars in respect ofbusiness in securities if working within a distance of fifty miles of the city of Bombay;

(vi) does not issue price lists or pamphlets or circulars in respect of business in securities to other than itsown constituents if acting as a broker beyond the distance of fifty miles from the city of Bombay.

Percentage share of Brokerage

(b) A member may pay his remisier or authorised clerk, any other employee or any other person sharing brokerage asprovided in sub-clause(a), a share not exceeding 50 per cent of the brokerage charged to the constituent introducedby him.

RULESREMISIERS

Remisier

216. A person who is engaged by a member primarily to solicit commission business in securities shall be called aremisier.

Commission Terms

217. A member shall be entitled to employ remisiers for the purpose of his Stock Exchange business and to remuneratethem with a share not exceeding fifty per cent of the brokerage charged to the principals they introduce.

Permission Necessary

218. No member shall employ any remisier without first having such appointment approved by the Governing Board.

Ex-members as Remisiers

219. A member may with the special consent of the Governing Board employ as his remisier a person who hasceased to be a member under the Rules, Bye-laws and Regulations of the Exchange.

Remisier Not to be Another’s Employee

220. A remisier may be an individual or firm but must not be in the employ of any individual or firm.

Remisier to Act for one Member only

221. No person shall be registered as a remisier to more than one member.

Application

222. (a) A member desirous of employing a remisier shall apply for the permission of the Governing Board in such form

142

as the Governing Board may from time to time prescribe. Such form shall be signed both by the member andthe proposed remisier.

Discharge Certificate

(b) An application by a member to employ a remisier who previously had been acting as a remisier or authorisedclerk with another member must be accompanied by a discharge certificate from the former employer oremployers. Such discharge certificate shall be in such form as the Governing Board may from time to timeprescribe and it shall show whether the remisier or authorised clerk left his former employer or employersclear of all debts and outstanding liabilities and whether his conduct while in that employment was satisfactory.

Absence of Discharge Certificate

(c) When a discharge certificate is not attached to an application as required under sub-clause (b) the proposedremisier shall submit an explanation therefor and the Governing Board or the President shall then decidewhether and on what conditions the requirements relating to the discharge certificate shall be waived and ifthere be any dispute between the proposed remisier and his former employer the Governing Board or thePresident may refer it to the Arbitration Committee for its adjudication or may require that the dispute bedecided by arbitration in accordance with the Bye-laws and Regulations of the Exchange relating to arbitrationother than between members.

Remisier Not to Engage in Forward Business

223. The Governing Board may refuse permission to a person desirous of working as a remisier unless he gives anundertaking that forthwith on registration as remisier he will cease to engage himself as principal or employee inand not be directly or indirectly connected with any other kind of forward business.

Approval or Rejection of Application

224. The Governing Board in its discretion may approve or reject any application for appointment of a remisier.

Withdrawal of Permission

225. The Governing Board in its discretion may at any time terminate the approval of a remisier whereupon the membershall discontinue the employment of the remisier concerned.

Termination

226. Each member shall give prompt notice to the Exchange of the termination of the employment of a remisier.

Register of Remisiers

227. (a) A register of remisiers shall be maintained by the Exchange in which shall be entered the names of allremisiers together with the dates of their appointment and discharge and the names of the members employingthem.

Inspection of Register

(b) The register shall not be open to inspection generally but only to the President or to the Governing Boardsitting as such.

Registration and Removal

(c) The Governing Board shall have full power to refuse registration or to remove the name of any remisierfrom the register without assigning any reason.

Admission to the Floor

228. (a) A remisier may be allowed admission to the floor of the Exchange on 1 { such terms and conditions } as theGoverning Board may from time to time prescribe.

143

Admission during Good Behaviour

(b) A remisier shall be admitted to the floor of the Exchange only during good behaviour and shall be bound toobserve the Rules, Bye-laws and Regulations of the Exchange.

Grant, Refusal or Suspension of Admission

(c) The Governing Board may in its absolute discretion refuse admission to the floor of the Exchange to theremisier of any member and may at any time suspend the admission of such remisier without assigning anyreason whatsoever.

Remisier Not to Make Bargains

229. When on the floor of the Exchange a remisier shall not make bargains in his own name or on behalf of hisemployer or any other member. A remisier acting in violation of this provision shall be immediately suspended orexpelled by the Governing Board or the President.

Remisier Not to Sign Contract Notes

230. A remisier shall give the names of his constituents in whose names contract notes are to be rendered by themember for whom the remisier acts. The remisier shall not sign contract notes in his own or any other name norshall he sign on behalf of his employer unless appointed by such employer as his constituted attorney for thatpurpose.

Remisier Not to Advertise

231. A remisier shall not advertised or issue price lists or circulars to other than his own constituents.

Remisier’s Personal Business

232. A remisier may not act as a remisier for his personal business. No allowance shall be made for the brokerage uponbusiness for his own personal account.

Sub-Agent

233. If a remisier in whatever circumstances directly or indirectly divides or shares his brokerage with his constituent orsub-agent his name shall be forthwith removed from the register.

1 Substitute by Governing Board Resolution dated the 19-11-68 and approved by Govt. on 24-12-68 Rule TheStock Exchange, Mumbai 84

Remisier Not to Share Brokerage with Constituents

234. Members shall be held responsible that remisiers make no allowance or return of brokerage directly or indirectlyto the constituents they introduce or to any other person or agent.

Security

235. (a) When the employing member so requires a remisier shall on registration provide security for the sum ofatleast Rs. 5,000 and shall maintain such security with the Exchange at all times during the period hecontinues to be a remisier with such member.

Provisions as to Security

(b) The provisions in these Rules relating to security provided by a member shall apply mutatis mutandis tosecurity provided by a remisier under subclause (a)

Lien on Security

(c) The member for whom a remisier is working shall have a first charge on the security for the due fulfillmentof his engagements, obligations or liabilities arising out of or incidental to any bargains, dealings, transactionsand contracts made with him or on his behalf or with or on behalf of his constituents subject to the Rules,

144

Bye-laws and Regulations of the Exchange or anything done in pursuance thereof.

Return of Security

(d) On the termination of his employment or in the event of hisdeath all security not applied under the Rules,Bye-laws and Regulations of the Exchange shall at the cost of the remisier be repaid and transferred to himor as he shall direct or in the absence of such direction to his legal representatives.

Letter of Declaration

e) A remisier providing security under the provisions of these Rules shall sign a Letter of Declaration in theform prescribed in Appendix F to these rules or in such other form as the Governing Board may from time totime prescribe.

145

FORM A

Form for Approval of Appointment of Remisier

(To be filled in by the Member)

Name of the Member :

Address :

Clearing No. :

Date :

The Secretary,The Stock Exchange,Mumbai.

Sir,

I/We hereby appoint Mr./Ms./M/s as my/our Remisier.

I/We declare that all particulars and information given in the enclosed form duly filled in by my/our the abovementionedremisier are true and correct.

Yours faithfully,

Signature & Rubber Stamp of Member

146

FORM B

Form for Appromval of Appointment of Remisier( To be filled in by the Remisier who is an Individual)

1. Name :

2. Trade Name :

3. Address, Telephone / Fax Numbers :

(a) Residence :

(b) Office :

4. Date of Birth :

5. Sex : Male / Female :

6. Educational Qualification :

7. Present Occupation :

8. Residential Status : Resident Indian/ Non-Resident Indian/Others

9. Particulars of the Bank Account (Any one)

r Name of the Bankr Branch (Address & Tel. No.)r Bank Account Numberr Date of opening of account

10. Income Tax No. (PAN/GIR) :

11. A certified copy of any one of the following proof of identity shouldbe submitted:

r Passportr Driving Licencer Ration Cardr Voters Identity Cardr Copy of Income Tax return

12. State any other relevant information ,which in your opinion, should be disclosed to the Exchange :

I, hereby further declare that

13. * I am/was a Remisier of and I send herewith his/her/their clearance/discharge certificate .

14. I shall not issue contracts nor bills nor any confirmation memo for shares and securities in my own name.

15. I have read the present Rules, Bye-laws and Regulations of the Exchange and undertake to abide by them andany modification/ amendment thereof.

16. I undertake that if any claim or dispute arises between us in respect of any transactions, contracts, etc. enteredinto, with or through him/ on account of my clients or in relation to any Stock Exchange matter during my continuanceas a Remisier of

Please attachlatest

photograph &sign on thephotograph

147

I shall be bound to refer it to Arbitration as per the Rules, ByeLaws and Regulations and conventions of theExchange which are applicable to Remisier that any decision in such Arbitration shall be final and binging on me.

17. During my continuance as a Remisier of

(name of member)

I shall not work as an employee / sub-broker / remisier of any member, individual, firm or organisation.

The information furnished above is true to the best of my knowledge and belief, and I undertake to inform you of anychange therein immediately in writing.

Signature of Remisier

* Please strike off if not applicable

148

Notice no : 20031006-21Notice date : Monday, October 06, 2003Subject : Waiver of Remisier Registration Fees.Segment Name : General

CONTENTS :

6th October, 2003.

N O T I C E

Members are hereby informed that the one time non-refundable remisier registration fee of Rs. 5000 has been waivedwith immediate effect. Many members have represented to the Exchange that registration fee for remisiers should bewaived to ensure more enrolment of new remisers and possible expansion of business. In view of the above , theGoverning Board in its meeting held on September 8, 2003 has decided to waive the one-time non-refundable registrationfee of Rs.5,000 charged by the Exchange in respect of the new applications for Registration of Remisiers.The memberscan avail of this opportunity by registering more remisiers for augmenting their business. Remisier Application Form isavailable at BSE Publication Counter. (Ground Floor, P.J Tower) or the same can be download from our websitewww.bseindia.com/about/downloads.asp. The member may contact the following persons for any information on remisierregistration.

Name Intercom

Jaideep Vaidya 8145

Rakesh Parekh 8307

Kevin DesouzaChief General Manager : Membership & Inspection.

149

Notice No.: 62311/2000Dated : 14 September, 2000

NOTICE

Sub : Registration of Sub-Brokers.

Attention of members is drawn to Notice no.54809/2000 dated July 1, 2000, wherein members were advised to dealonly with Sub-Brokers who are registered with SEBI.

2. It may be noted that Securities & Exchange Board of India (SEBI) has stipulated that no person/entity who may beacting as a Sub-Broker shall buy, sell or deal in securities unless he is registered with SEBI as a Sub-Broker. SEBIhas further advised that Members of Stock Exchanges who are executing transactions of their clients throughmembers of other Exchanges are to be treated as a ‘Sub-Broker’ and accordingly these members should hold aseparate registration as Sub-Brokers. SEBI has put the onus on Members to ensure that their clients are notacting in the capacity of Sub-Brokers without complying with the said requirement.

3. It has been observed during the periodical inspections of books of accounts and other documents of the membersthat some members deal with Sub-Brokers who are not registered with SEBI and/or deal with persons/entitieswho are registered as clients with the members but appear to be acting as Sub-Brokers.

4. In this connection, it has been decided to carry out inspection of the member’s books and other documents toascertain compliance of the above requirement. It may be noted that apart from levying fine of Rs.25,000/- forevery unregistered Sub-Broker dealt with by the Member (as decided by the Disciplinary Action Committee),further disciplinary action may be initiated against such members.

5. Members are once again advised to deal only with Sub-Brokers who are registered with SEBI and to ensure thattheir clients are not acting in the capacity of a Sub-Broker.

6. In case members require any clarifications, they may please contact any of the following officials:

Sr.No. Name Intercom No.

1. Shri Rajesh Gandhi 8281

2. Shri Tushar Sodha 8139

P.S. Reddy

150

Notice No. : 54809/2000Date : 1st July, 2000

Sub: Members of Stock Exchanges acting as sub-brokers

Members are aware that SEBI has directed that no member of a Stock Exchange shall deal with a person who is actingas a sub-broker unless he has obtained Certificate of Registration from SEBI to act as a sub-broker under SEBI (StockBrokers and Sub-Brokers) Rules & Regulations, 1992. SEBI has put the onus on the member to ensure that his clientsare not acting in the capacity of a sub broker without registration.

2. With the expansion of BOLT TWSs to centers outside Mumbai, many members of the Exchange have allotted theirBOLT TWSs to members of other Exchanges.

3. SEBI has clarified that members of Exchanges executing transactions of other clients through the members ofother Exchanges are to be treated as sub brokers. Accordingly, members of Stock Exchanges who also act assub-brokers should hold a separate registration with SEBI as a sub broker.

4. Members are therefore advised that if they have allotted their BOLT TWSs to members of other Exchanges, theyare required to get the members of other Exchanges registered with SEBI as their sub-brokers immediately.

5. In case members require any clarification, they may please contact any of the following officials:

Sr.No. Name Intercom No.

1. Shri Rajesh Gandhi 8281

2. Shri Amit Garg 8589

P.S. Reddy

151

Notice no : 20030228-3Notice date : Friday, February 28, 2003Subject : Affiliation of sub-brokers with membersSegment Name : Equity

CONTENTS :

The members are aware that all sub-brokers are required to obtain certificate of registration from Securities andExchange Board of India (SEBI) in accordance with SEBI (Stock Brokers & Sub-brokers) Rules and Regulations 1992without which they are not permitted to buy, sell or deal in securities. The registered sub-broker can deal in securitiesonly through the member who had recommended his application for registration. Asub-broker may be affiliated with more than one member provided, he obtains separate registration in each case, fromSEBI.

At present, there are no restrictions on the number of members with whom one sub broker may affiliate, and therefore,many sub brokers have obtained registration by affiliating themselves with multiple members of this Exchange. Thishas in many cases, affected the quality of service provided by the sub-brokers to their clients, and in case of disputes,there are complications for the concerned members with whom such sub brokers are affiliated.The Governing Boardof the Exchange in its meeting held on January 25, 2003 considered the matter and decided that henceforth, one sub-broker can be affiliated with only one member of the Exchange.

In view of the above, the members having sub-brokers who are affiliated with multiple members of this Exchange, arerequested to direct their sub-brokers to select, within a period of 6 months from the date of this Notice, one memberwith whom they wish to continue to remain affiliated and should immediately initiate the procedure for cancellation ofregistration in respect of all other members of the Exchange.In case of cancellation of the broker - sub broker agreement/s (except one with whom the sub broker would continue to remain affiliated), the member would be required to intimatethe Membership Department of the Exchange, alongwith a letter from the concerned sub broker and enclose the originalSEBI registration certificate issued to such sub broker.

Further, a copy of the advertisements issued in this regard (original or certified) in a local newspaper where the subbroker’s Registered office/Head office /Corporate office is situated and another in English daily newspaper with widecirculation should also be enclosed. (Members may refer to Exchange Notice No 93413/2001 dated July 23, 2001 forfurther details ).

For cancellation of sub broker registration, members are requested to ensure that their sub brokers have paid theannual fees to SEBI, till date. Further, subsidiaries of Regional Stock Exchanges, who are members of the Exchange,should ensure that their sub brokers have paid the requisite turnover based fees to SEBI, prior to forwarding theapplications for cancellation of registration of such sub brokers to the Membership Department. It may however benoted that a sub-broker of a member of this Exchange can continue to be affiliated with members of any other StockExchange.

In case members require any further clarification in this regard they may please contact their Account Managers orthe Membership Department on Board Nos 22721233 / 34 Extn No – 8024 / 8277

Sunil Vichare

General Manager - Membership Services

152

Notice no. : 20030905-1Notice date : Friday, September 05, 2003Subject : Minimum Networth RequirementSegment Name : Equity

CONTENTS :

The Governing Board at its meeting held on August 19, 2003 has directed that all the active members of the Exchangeshould have adequate Networth on a continual basis. Accordingly, if the Networth of any active member turns negativeat any point of time, the BOLT TWS of such members may be deactivated until he regains a positive Networth.

Attention of members is also drawn to Exchange Notice No. 20030430 – 7 dated April 30, 2003 wherein, memberswere requested to comply with the requirement of maintaining minimum Networth of Rs. 30 lakhs in case of individualmembers, Rs. 50 lakhs in case of corporate members and Rs. 50 lakhs + 50% for each additional membership rightheld in case of composite corporate members, by March 31, 2004.

Members are once again requested to ensure that adequate Networth is maintained on a continual basis and alsoensure compliance with stipulated minimum Networth requirement by March 31, 2004.

In case members require any clarification, they may please contact any of the following officials :

Sr. No. Name Intercom No.

1. Mr. Atul Bapna 8595

2. Mr. Ranjan Prabhu 8214

3. Mr. Tushar Sodha 8139

Kevin Desouza

Chief General Manager – Inspection & Membership

153

Notice no. : 20040524-10Notice date : Monday, May 24, 2004Subject : Submission of Audit Report, Annual Accounts and Networth Certificate as on March 31,

2004 for Cash and Derivative SegmentSegment Name : General

CONTENTS :

The Governing Board at its meeting held on 20th March, 2004 decided that the Networth Certificate as on 31st Marchshould be submitted by 30th September failing which fines will be imposed in terms of the Exchange Notice No. 20031112-5 dated November 12, 2003 for a period of six months i.e. till 31st March of the next year. The BOLT Terminals of thedefaulting members will be deactivated w.e.f 1st April of the next year.

Pursuant to the above, all active members including Representative members of Cash segment and Limited Tradingmembers of the Derivative segment of the Exchange are advised to submit the Audit Report, Annual Accounts for theF.Y. 2003-2004 as well as Networth Certificate as on March 31, 2004 (on the basis of audited accounts) to theInspection Department on or before September 30, 2004, failing which the action will be taken as mentionedabove.

Further in connection to submission, it is clarified as under:

1. Audit Report should strictly be in the format enclosed as Annexure - 1

2. Formula for calculation of Networth has been revised. Accordingly, members may please note that the NetworthCertificate should be strictly in the format prescribed vide Exchange Notice No.20040308-10 dated March 8, 2004enclosed as per Annexure - 2

3. Members who are Clearing Members of the Derivative Segment of the Exchange (including trading cum clearingmember) are required to submit the Networth Certificate as per the format enclosed as Annexure – 3.

4. Members observing the accounting period other than financial year ending March 31, are also required to submitAudit report, Audited accounts for the financial year ending March 31, 2004 and Networth Certificate as on March31, 2004.

5. Audit Report / Networth Certificate should be in Original, on the letter head of the Chartered Accountant andshould also contain the Membership No. & seal of the Chartered Accountant.

6. Members who have traded even for a single day during the financial year 2003-2004 are also required to submitthe Audit Report, Audited Accounts and Networth Certificate.

7. Members are required to submit only one set of Audit Report, Audited Accounts and Networth Certificate for Cashand Derivative segments of the Exchange.

8. The members may note that the Audit Report, Annual Accounts and Networth Certificate should be submittedalongwith a covering letter to the Inspection Department on the 1st floor of Rotunda Building on or before September30, 2004. Any of the above documents submitted separately would not be accepted.

9. The members may please note that submission of incorrect, unaudited or documents not being in the prescribedformat will be treated as non submission of the same.

In case members require any clarification, they may please contact any of the following officials;

Sr. No. Name Intercom No.

1. Mrs. Shaila Valsan 8316

2. Mr. Ranjan B. Prabhu 8214

154

For further clarification on Networth formula and format of the Networth Certificate Members may contact the followingofficial from the Membership Dept.

Sr. No. Name Intercom No.

1. Mr.Atul Bapna 8595

Kevin Desouza Mayank MehtaChief General Manager Asst. General ManagerInspection & Membership Inspection

155

Annexure “1”

(Format of the Audit Report to be submitted in original and on the letterhead of the Chartered Accountant)

“We have audited the attached Balance Sheet of M/s. as at and theProfit & Loss Account for the year ended on that date annexed thereto and report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief werenecessary for the purpose of our audit.

b) In our opinion, proper books of account and records as specified in Rule 15 of the Securities Contracts(Regulation) Rules, 1957 have been kept so far as appears from our examination of such books.

c) The member has complied with the requirements of the Exchange, so far as they relate to maintenance ofaccounts and was regular in submitting the required accounting information to the Exchange.

d) The Balance Sheet and the Profit & Loss Account referred to in this report are in agreement with the booksof accounts.

e) In our opinion and to the best of our information and according to the explanations given to us, the saidBalance Sheet and the Profit & Loss A/c read together with the notes thereon give a true and fair viewinsofar as it relates to the Balance Sheet, of the state of affairs of M/s , and in so far asit relates to the profit and loss account, of the profit/loss of M/s for the year ended onthat date.”

For (Name of Accounting Firm)

Name of Partner / ProprietorSignature & Seal of Chartered AccountantMembership Number :

Place :

Date :

156

Annexure “2”

(In Original & on the letterhead of the Chartered Accountant)

CERTIFICATE This is to certify that the networth of M/s. (Clg. no. ), member of BSE as on

as per statement of computation of networth of evendate annexed to this report is Rs. /-(Rupees Only).

It is further certified that the computation of networth, based on my / our scrutiny of the books of accounts, recordsand documents maintained by the member and produced before me / us for verification, is true and correct to the bestof my / our knowledge and as per information provided to my / our satisfaction.

For (Name of Accounting Firm)

Name of Partner / ProprietorSignature & Seal of Chartered AccountantsMembership Number :

Place :

Date :

157

Annexure “2”

(For members other than Clearing members of Derivatives segment)

Name of the Member

Clearing No.

Statement of Networth as on ————

Particulars Rs. Rs. Rs.1 Listed (Quoted) Investments

2 Market Value of listed (quoted) securities (other than Government) xin the name of member (forming part of the Balance Sheet)

3 Margin of 30% on Market Value of listed (quoted) securities x(other than Government) i.e. 30% of 2

4 Net Value of listed (quoted) Investments (other than Government) i.e. 2-3 x

5 Market Value of listed (quoted) securities (Government) in the name of xmember (forming part of the Balance Sheet)

6 Margin of 10% on Market value of listed (quoted) securities (Government) xi.e. 10% of 5

7 Net Value of listed (quoted) Investments (Government) i.e. 5-6 x

8 Unlisted (unquoted) Investments

9 Book value of Unlisted (unquoted) Securities x

10 Margin of 50% on Book Value of Unlisted (unquoted) Securities x i.e. 50% of 9

11 Net value of Unlisted (unquoted) Investments i.e. 9-10 x

12 Other Investments at cost, if any x

13 Total Net Investments (4+7+11+12) x

14 Fixed Assets (used for the purpose of business) including land & building x

15 Receivables which are less than 3 months old x

16 Loans, Advances and Deposits

17 Loans and advances excluding loans and advances given xto associates and related entities

18 Deposits excluding non-refundable deposits x

19 Cash & Bank Balance x

20 Other Assets, if any, (specify), which are used for the purpose xof business

21 Total Assets (13+14+15+17+18+19+20) X

22 Current Liabilities x

23 Long Term Liabilities x

24 Total Liabilities (22+23) X

25 Net Worth (21 – 24) X

158

Annexure “2” NOTE

1 For computation of loans and advances and sundry debtors (arising from securities operations and others) as acomponent of current assets, all advances / loans and sundry debtors other than those arising out of securitiesdealing have to be excluded. Only such loans, advances and sundry debtors arising due to the securities dealingsare to be included as current assets for the purpose of networth computation.

2 Details of items comprising investments, current assets, current liabilities and long term liabilities should be givenseparately.

3 The following non-allowable assets should not be included in any head, while computing the networth:-

(a) Pre-paid Expenses

(b) Losses/ Accumulated losses

(c) Miscellaneous Expenditure

(d) Deferred Expenditure

(e) Bad deliveries

(f) Intangible assets

(g) Doubtful debts / advances not provided for

(h) Non-refundable deposit

(i) Loans and advances given to related entities.

(j) Advances against capital expenditure.

(k) Value of the Exchange card

159

Annexure “ 3”

(In Original & on the letterhead of the Chartered Accountant)

CERTIFICATE

This is to certify that the networth of M/s. (Clg. no. ), member of BSEas on , as per statement of computation of networth of even date annexed to this report is Rs.

/- (Rupees Only).

It is further certified that the computation of networth, based on my / our scrutiny of the books of accounts, recordsand documents maintained by the member and produced before me / us for verification, is true and correct to the bestof my / our knowledge and as per information provided to my / our satisfaction.

For (Name of Accounting Firm)

Name of Partner / ProprietorSignature & Seal of Chartered AccountantsMembership Number:

Place :

Date :

160

Annexure “ 3”

Clearing Members of the Derivatives Segment (including Trading cum Clearing members).

CAPITAL + FREE RESERVES

Less: non-allowable assets

(a) Fixed assets

(b) Pledged Securities

(c) Member’s card

(d) Non-allowable securities (unlisted securities)

(e) Bad deliveries

(f) Doubtful debts and advances*

(g Prepaid expenses, losses

(h) Intangible assets

(i) 30% of marketable securities

* Explanation – Includes debts/advances overdue for more than three months or given to associates.

Clarification:

I] Point no. (b) Pledged securities

Pledged securities are required to be deducted at book value.

II] Point No. (i) 30% of marketable securities

(1) Marketable securities are to be valued at Book value or Market value, whichever is lower. The haircut of30% shall be applicable on the Book value or the market value, whichever is lower. Considering this, thepoint (i) is reproduced as below:

“30% (of Book value or Market Value, whichever is lower) of marketable securities”

(2) Pledged securities are not to be considered at point no. (i)

(3) Securities held as stock-in-trade, are not to be considered at point no. (i)

(4) Investment in Mutual fund, though not listed on any Exchange, may be considered as marketable securitiesand must treated as per point no. (i)

161

Notice no. : 93424/2001Notice date : Monday, July 23, 2001Subject : UNIQUE CLIENT CODE

CONTENTS :

Sub: - Unique client code

The members are aware that the Exchange vide Notice Nos. 90210 & 93117/2001 dated June 21 & July 20, 2001respectively, informed that as per the SEBI directive, w.e.f. August 1, 2001, all the orders entered on BOLT valued atRs. one lakh or more would be validated against the client codes and the PAN /Passport No/Driving license No/Votercard No. The Exchange has made necessary provisions on BOLT for the members to register the clients/clients ofsub-brokers.

In this regard, SEBI vide their circular dated SMDRP/Policy/CIR-39/2001 dated July 18, 2001 (copy enclosed) hasfurther clarified as under :-

It would be mandatory for all members and their sub-brokers to use unique client codes for all clients. The memberswould be required to collect and maintain in their back office the Permanent Account Number (PAN) allotted by IncomeTax Department for all their clients as well as the clients of their sub-brokers for this purpose. Where an individualclient does not have PAN, such client would be required to give a declaration to that effect to the concerned Member.

In the event the PAN is not available, such client would be required to furnish to the member, the passport numberand place & date of issue. Where the client does not have a PAN or a passport, such client should furnish the drivinglicense number and the place & date of issue. If none of these are available, the client shall give his Voter ID number.

In the case of FIIs, (where FII, itself is the investing entity) and their sub-accounts, SEBI registration number for FIIsand sub-account shall be used until the PAN is allotted.

For tax paying body corporates, the unique registration number issued by the relevant regulatory authority shall beused till the time the PAN is allotted. The Regulatory authorities may be Department of Company Affairs, Securitiesand Exchange Board of India, Reserve Bank of India, Insurance Regulatory Development Authority, etc

For non-tax paying entities other than mutual funds, such as societies, charitable trusts etc., the unique registrationno. allotted by the relevant regulating authority to these entities shall be used until the PAN is allotted.

For mutual funds, SEBI would be issuing an ID no. for schemes both past one and the new ones. This number wouldbe used in the schemes along with the mutual funds.

The members would be required to verify all the documents in respect of the unique code and retain a copy of thedocument.

The members would also be required to furnish the above particulars of their clients to the Stock Exchanges/ClearingCorporations and the same would be updated every quarter.

The Exchange would also maintain a database of client details submitted by members. Historical records of all quarterlysubmissions would be maintained for a period of seven years by the Exchange.

The members would be required to include a new clause no. 7 as given below in the format of the Member-ClientAgreement prescribed vide our earlier Notice No 1798/97 dated April 24, 1997,

“The member hereby undertakes to maintain, the details of the client as mentioned in the client registration form orany other information pertaining to the client, in confidence and that he shall not disclose the same to any person /entity except as required under the law, with prior intimation to SEBI.”

The members would be required to maintain and preserve for a period of seven years a mapping of client IDs used at

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the time of order entry in the trading system with those unique client IDs along with client name, address and otherparticulars given in the Know Your Client form.

The above requirement shall be applicable w.e.f. August 01,2001, for clients having order value of Rs.1 lakh or more.

The members are advised to make note of the same and comply with the above requirements. Those members whofail to input the unique client details as stated above, in the BOLT, may not be able to input orders valued at Rs. 1 lakhor more.

In case members require any clarification, they may please contact any of the following officials.

S.No Name Dept. Intercom No.

1. Shri Amit Garg Inspection 8589

2. Shri Narsinh Prabhu Inspection 8166

3. Shri Sugan A. Natarajan ISD 8116

P.S. ReddyGen. Manager Inspection & Surveillance.Encl. as above

163

Notice no. : 20040128-3Notice date : Wednesday, January 28, 2004Subject : Mandatory Registration with BSEwebx for registration of UCC using new UCC software.Segment Name : General

CONTENTS :

Members of the Exchange are aware that Securities and Exchange Board of India (SEBI) has made it mandatory forall brokers to use Unique Client Codes (UCC) for all clients in the Cash & Derivatives segments, vide its CircularNo. SMDRP/Policy/CIR-39/2001 dated July 18, 2001 & Circular No. SMDRP/DC/CIR-10/01 dated Nov 2, 2001respectively. As per SEBI directions, the Stock Exchanges are also required to maintain the details of the clients of themembers.

Pursuant to the above, the Exchange has issued notices from time to time to ensure compliance of SEBI requirementsin regard to registration of Unique Client Codes alongwith accompanying necessary details like PAN, Passport Details,etc.

In order to have effective implementation of provisions contained in SEBI circulars, the Exchange is pleased to announcethe launch of its new UCC software covering Cash & Derivatives segments. The new UCC software will allow membersto register the mandatory /non-mandatory details pertaining to clients on the system.

It is mandatory that members register themselves with BSEwebx for downloading the new UCC software. Registrationof Members with BSEwebx for the new UCC software will begin from Jan 29, 2004. The registration form is availablein the folder BSEwebx\Regkit. If a member is already registered with BSEwebx, he needs to fill in the formBSEwebxmember.doc and the undertaking – Undertaking2.doc. If a member is not registered with BSEwebx, he needsto fill in the form newmember.doc and the undertaking – Undertaking1.doc.

Kindly fill the registration form and submit it to Mr. Bharat Dave, ISD Projects (Extn. No. 8150, 2nd Floor, RotundaBuilding) between Jan 29, 2004 to Feb 7, 2004. There are currently no charges for signing up and using BSEwebx.Members are also requested to avail of the other functionality including Internet Trading and Digital Contract Notessystem in BSEwebx, which is available free of cost.

The new software is to be used from Feb 9, 2004 for UCC registrations & the existing software would be discontinuedfor fresh registrations/updations from the said date.

Another notice pertaining to the new UCC software & related matters would be issued by next week.

Members may contact the following for any assistance/clarification :

NAME DEPARTMENT ACTIVITY EXTN. NO.

Mr. Bharat Dave Information Srvices Department Registration with BSE webx 8150

Mr. Mukesh Kuwad Inspection UCC Related Issues 8497

MR. Mandar Patkar Surveilance -’’- 5093

Kevin Desouza Mayank J. MehtaChief General Manager Asst. General Manager(Inspection & Membership) (Inspection)

164

Notice no. : 20040407-13Notice date : Wednesday, April 07, 2004Subject : Revised Penalty structure with effect from

April 1,2004 for modification of client codes inPost Closing Session.

Segment Name : General

CONTENTS :

Attention of the members is drawn to the Exchange Notice No.20030329-1 dated March 29, 2003 whereby the memberswere advised to utilize the facility of modification in client codes to the minimum extent possible & ensure that correctclient codes are entered while placing orders. Members attention is also drawn to Exchange Notice No. 20030409-3dated April 9, 2003 wherein members were informed the penalty structure for misutilisation of the facility of modificationof client codes in the post closing session. In the said notice, it was mentioned that penalty leviable would be computedon the basis of number of instances of client code modification per 1000 of trades on a daily basis.

Pursuant to the recommendations made by the Disciplinary Action Committee at its meeting held on March 31, 2004,the Governing Board at its meeting held on April 2, 2004 decided to impose penalty on the basis of percentage ofclient codes modified to total orders on a daily basis. The Governing Board decided to revise the penalty structurew.e.f. April 1, 2004 as under :

Percentage (%) of client code modified tototal orders on a daily basis Fine

Less than or equal to 1% Nil

Greater than 1% but less than or equal to 5% Fine of Rs.500/- lump sum

Greater than 5% but less than or equal to 10% Fine of Rs.1000/- lump sum

Greater than 10% matter to be referred to Fine of Rs.10,000/- and theDAC for further action

The Governing Board also decided that the penalty would be levied on weekly basis w.e.f. April 1, 2004.

The Exchange will make necessary arrangements for downloading to the members details regarding modification inclient codes carried out & the penalty leviable thereon.

The members are further informed that the fines payable for modifications of client codes for the period may 2003 toMarch 2004 will be individually intimated to them shortly.

For any clarification in the matter, the members may contact the following officials on Tel. Nos. - 22721233 / 34:

NAME INTERCOM NO.

MUKESH KUWAD 8497

SANJAY PARDIWALLA (FOR SYSTEMRELATED QUERIES ONLY) 8252

Kevin Desouza Mayank J. MehtaChief General Manager Asst. General Manager(Inspection & Membership) (Inspection Department)

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Notice no : 20041015-6Notice date : Friday, October 15, 2004

Subject : Revised Penalty structure with effect from October 1, 2004 for modificationof client codesin the Post Closing Session.

Segment Name: Equity

The Governing Board at its meeting held on October 07, 2004 decided to revise the penalty structure for modificationof client codes in the Post Closing Session w.e.f. October 1, 2004 as under:

Revised Penalty Structure –

Modifications upto 5 numbers (non-institutional only) per member per day (no cumulative benefit available), irrespectiveof total number of orders executed will be exempted. Thereafter, the penalty is to be calculated on a daily basis asfollows :

Percentage (%) of *client code modified to **total orders on a Finedaily basis after deducting a maximum of 5 non-institutionalmodifications.

Less than or equal to 1% Nil

Greater than 1% but less than or equal to 5% Fine of Rs.500/- lump sum per day.

Greater than 5% but less than or equal to 10% Fine of Rs.1000/- lump sum per day.

Greater than 10% Fine of Rs.10,000/- per day and the matterto be referred to DAC for further action.

*Client code modified means Total client codes modified less Institutional codes modified.

** Total orders means Total orders executed less Institutional orders executed.

The Exchange is making necessary changes to the software to compute penalty as per the revised structure. Thedaily & monthly penalty reports as per the revised structure would be downloaded to the members once the necessarychanges are made. Till such time, the current reports would continue to be downloaded.

For any clarification in the matter, the members may contact the following officials on Tel. Nos. - 22721233 / 34:

NAME INTERCOM NO.

MUKESH KUWAD 8497

SANJAY PARDIWALLA (FOR SYSTEM -RELATED QUERIES ONLY) 8252

Devika Shah Mayank J. MehtaGeneral Manager Asst. General ManagerMembership & Inspection Inspection

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Notice No : 20060221-11Notice Date : Tuesday, February 21, 2006Subject : Revision of Penalty structure for modification of Client Codes in the Post Closing Session

CashSegmentSegment Name : General

Attention of the Trading Members of the Exchange is drawn to our previous Notice No. 20041015-6 dated October 15,2004 wherein the revised penalty structure for modification of client codes in the post closing session was notified tothe members.

It has been decided to modify the aforesaid penalty norms as under :-

Notes :

1 Client code modified means Total client codes modified less Institutional client codes modified.

2 Total orders means Total orders executed less Institutional orders executed.

In order to identify habitual offenders and deter them, it has been decided that the Exchange would consider theimmediately preceding past four months track record of the member, including the relevant month for whichpenalties are to be computed. Accordingly, violations which have occurred in the immediately preceding fourmonths, would be considered while calculating the penalties for the relevant month.

For habitual offenders, higher penalties would be levied after considering the violations that have occurred in theimmediately preceding four months including the month for which penalties are levied. For habitual offenders, thefollowing would be the penalty structure -

Percentage (%) of 1client code modified Existing Fine Revised Fine to 2total or ders on a daily basis after Rs. Rs.deducting a maximum of 5 non-institutionalmodifications

Less than or equal to 1% Nil Nil

Greater than 1% but less than or equal to 5% Fine of Rs.500/- lump sum per day Fine of Rs.500/- per day

Greater than 5% but less than or equal to 10% Fine of Rs.1000/- lump sum per day. Fine of Rs.1000/- per day.

Greater than 10% Fine of Rs.10,000/- per day Fine of Rs.10,000/- per day.and the matter to be referred toDAC forfurther action.

Percentage of Client No. Of Instances of Modifications FinesCode Modifications

Greater than 5% but less than or equal More than 10 instances in the Fine of 2 times of Rs. 1000/- to 10% past 4 months. the regular penalty from the

11th instance onwards.

Greater than 10% More than 5 instances Fine of 2 time the regularduring past 4 months. penalty of Rs.10,000/- from

the 6th instance onward.

167

The revised penalty structure for habitual offenders would be made effective for computing penalties from the monthof April 2006 & thereafter. Till then, the existing penalty structure for modification of client codes would continue. Membersmay thus, note that for computing the penalty for the month of April 2006, the relevant data would be pertaining to themonths of January 2006, February 2006, March 2006 & April 2006.

Members are advised to take note of the above revised penalty structure. They may contact any of the following officialsin case of any further clarifications-

NAME INTERCOM NO.

Ms. Parul Kothari 8196

Mr. Mukesh Kuwad 8497

Ms. Amita Tarwale 8262

Sanjiv Kapur Pankaj GuptaGeneral Manager Asst. General Manager Surveillance & Supervision Surveillance & Supervision

168

Notice no : 20060927-21Notice date : Wednesday, September 27, 2006Subject : Mandatory Requirement of Permanent Account Number (PAN) for transactions in Cash

Segment - Issues & ClarificationsSegment Name : General

CONTENTS :

To

All Trading Members,

Attention of the trading members is drawn to SEBI Circular No. MRD/DoP/SE/Cir-8/2006 dated July 13, 2006 andExchange Notice No. 20060713-19 dated July 13, 2006 on the captioned subject wherein PAN was mandatory forCash Segment with effect from October 1, 2006.

In the light of the practical difficulties expressed by various market participants in adhering to the deadline of September30, 2006, SEBI vide Circular No. MRD/DoP/Dep/SE/Cir-13/06 dated September 26, 2006 has extended the date ofimplementation of the requirement of mandatory PAN for Cash Segment to December 31, 2006 as a one time measure.

Further, the clarifications as contained in Paras 4.2 to 4.9 of SEBI Circular No. MRD/DoP/Dep/Cir-09/06 dated July20, 2006 have also been made applicable to trading in the cash market. A copy of the said circulars is enclosed herewithfor reference of the trading members.

In order to enable the trading members to comply with the above requirements, Exchange has been downloading thedetails of Unique Client Code (UCC) where PAN is not uploaded from time to time. A latest list of UCC's registeredwith the Exchange, where PAN of the clients are not available has been downloaded with the nameUCCWITHOUTPAN5.XXXX, where XXXX is clearing number of the trading member.

Further, the Exchange, is now also downloading a file named NPddmmyy on a daily basis which contains the detailsof client codes where trades have been executed during the day, however, the PAN details of such clients are notuploaded to the Exchange or the Client code itself is not registered in the UCC database. The above files are availablein the ALLDATA option of Dload32.

Trading members are once again advised to strictly comply with the following by December 31, 2006 taking intoconsideration the clarifications offered by SEBI, vide their circular dated September 26, 2006.

1. Collect copies of PAN cards issued to their existing as well as new clients by the Income Tax Department andmaintain the same in their record after verifying with the original.

2. Cross-check the aforesaid details collected from their clients with the details on the website of the Income TaxDepartment i.e. http://incometaxindiaefiling.gov.in/challan/enterpanforchallan.jsp.

3. Upload the PAN so collected and verified to the Exchange as part of the Unique Client Code details.

Trading Members should note that the aforesaid requirement is to be complied with for all their clients irrespective ofwhether client is presently registered in the UCC database or not, to enable these clients to trade after December 31,2006.

Further, trading members may note that with effect from January 1, 2007 they should place orders in the cash marketon behalf of their clients only if the PAN details of such clients has been collected, cross checked with the details onthe website of the Income Tax Department and uploaded to the Exchange as part of the Unique Client Code details ofthe respective clients.

169

For any further assistance / clarification in the matter, trading members may contact any of the following Exchangeofficials on 022 - 22721233 / 22721234 -

Sr. Name Extension No.

1. Nitesh Agarwal 8354

2. Yogesh Bambardekar 8286

3. K. Mohanan (For Technical Queries) 8416

Pankaj Gupta Yogesh BambardekarAsst. General Manager ManagerSurveillance & Supervision Surveillance & Supervision

170

Notice no : 20061229-26Notice date : Friday, December 29, 2006Subject : Penalty Norms for Non-registration of Client codes / Execution of trades without uploading

PAN details of clients in Cash segment.Segment Name : General

CONTENTS :

Attention of the Trading Members is drawn to SEBI circular no MRD/DoP/SE/Cir-18/2006 dated September 26, 2006wherein SEBI has made PAN mandatory for dealing in the cash segment.

Accordingly, the trading members are required to collect copies of PAN cards issued to their existing as well as newclients by the Income Tax Department and maintain the same in the record after verifying with the original. The TradingMembers are also required to upload the PAN details of their client to the Exchange as part of the UCC database andnot to execute the trade for the client unless the PAN details of respective clients have been collected, verified withthe Income Tax website and uploaded to the Exchange.

In order to ensure that the requirement of mandatory PAN is effectively implemented by the Trading Members, theExchange has introduced the following penalty scheme for non-registration of client codes / execution of trades withoutuploading PAN details of the clients to the Exchange.

Penalty of Rs.100/- per client code per day will be levied till the time the client code is registered along with PANdetails.

Further, in case of a wrongly punched code the penalty would be charged till the time trading member submits a letteron the letter head to the Department of Surveillance and Supervision (DOSS) informing the details of correct code inthe following format-

Date of Trade Wrongly punched Client Code Correct Client Code Reason of not rectifying the Code in postclosing session Date of registration correct Client Code with PAN details in UCC database

Further, a penalty of Rs. 100 /- Per wrong PAN uploaded to the Exchange in the UCC database in respect of clientswhere trades have been executed after January 1, 2007 would be charged.

The above penalty Scheme would be implemented for trades executed from January 2, 2007 onwards.

For any further clarification in this matter, the Trading Members may contact the following officials on 022-22721233/34: -

Sr. Name of the Official Extension No.

1 Ms.Yugandhara Patil 8214

2 Mr.Vinit Kabani 8262

P. K. Ramesh Pankaj M GuptaGeneral Manager Asst. General Manager(Surveillance & Supervision) (Surveillance & Supervision)

171

Notice no : 20080307-7Notice date : Friday, March 07, 2008Subject : Revision of penalty structure for non-registration of client codes along with PAN details

in the UCC database of the exchange.Segment Name : General

CONTENTS :

Attention of Trading Members is drawn to the Exchange Notice No.20061229-26 dated December 29, 2006 whereinpenalty structure for execution of trades without registering the client code along with PAN details of clients in theUCC database of the Exchange was notified to the members.

For habitual offenders, who violate the requirement of timely updation of UCC along with PAN details of their clients,higher penalties would be levied as under:

NO. OF DAYSFROM THE PENALTY1ST TRADE DATE

1 to 15 Rs. 100 per day per client code from 1st trade date till the date of registration or 15thday of 1st trade date, whichever is earlier.

16 to 30 Rs. 125 per day per client code from 16th day of the 1st trade date till the date ofregistration or 30th day of 1st trade date, whichever is earlier.

More than 30 Rs. 150 per day per client code from 31st day of the 1st trade date till the date ofregistration.

The revised penalty structure for habitual offenders would be made effective from April 01, 2008.

In case the Trading Members require any clarification, they may please contact any of the following officials of theExchange:

NAME INTERCOM NO.

Mr. Vinit Kabani 8262

Mr. Chirag Udani 8724

P. K. Ramesh Mitesh ThakkarGeneral Manager ManagerSurveillance & Supervision Surveillance & Supervision

172

Extract of Bye-law 358 (vi)

Business for a With Suspended, Expelled and Defaulter Members

A member shall be deemed guilty or unprofessional conduct for any of the following or similar acts or omissions namely-

(vi) if without the special permission of the Governing Board he shares brokerage with or carries on business or makesany bargain for or with any member who has been suspended, expelled or declared a defaulter.

173

Rule 8(1)(f) of SC(R ) Rules, 1957

The rules relating to admission of members of a stock exchange seeking recognition shall inter alia provide that:

(1) No person shall be eligible to be elected as a member if -

(f) he is engaged as principal or employee in any business other than that of securities except as a broker oragent not involving any personal financial liability unless he undertakes on admission to severe his connectionwith such business:

Provided that the Central Government may, for reasons sufficient in the opinion of the said government, permit arecognised stock exchange to suspend the enforcement of this clause for a specified period on condition that theapplicant is not associated with or is a member of or subscriber to or shareholder or debenture holder in or connectedthrough a partner or employee with any other organisation, institution, association, company or corporation in Indiawhere forward business of any kind whether in goods or commodities or otherwise is carried on or is not engaged asa principal or employee in any such business;

Rule 8 (3)(f) of SC (R) Rules, 1957.

(3) No person who is a member at the time of application for recognition or subsequently admitted as a membershall continue as such if -

(f) he engages either as principal or employee in any business other than that of securities except as abroker or agent not involving any personal financial liability, provided that -

(i) the governing body may, for reasons, to be recorded in writing, permit a member to engage himselfas principal or employee in any such business, if the member in question ceases to carry on businesson the stock exchange either as an individual or as a partner in a firm,

(ii) in the case of those members who were under the rules in force at the time of such applicationpermitted to engage in any such business and were actually so engaged on the date of such application,a period of three years from the date of the grant of recognition shall be allowed for severing theirconnection with any such business,

(iii) nothing herein shall affect members of a recognised stock exchange, permitted under the proviso toclause (f) of sub-rule (1) to suspend the enforcement of the aforesaid clause, for so long as suchsuspension is effective, except that no member of such exchange shall engage in forward businessof any kind whether in goods or commodities or otherwise and, if actually so engaged on the date ofsuch application, he shall severe his connection with any such business within a period of three yearsfrom the date of the grant of recognition.

174

SECURITIES AND EXCHANGE BOARD OF INDIASECONDARY MARKET DEPARTMENT

Mittal Court, A Wing, Gr. Floor,224, Nariman Point, Mumbai 400 021

SMD/POLICY/CIR-6//97May 07, 1997.

To ExecutiveDirectors / Presidents /Managing Directors of all Stock Exchanges.

Dear Sir,

Based on the suggestions/representations received from various Stock Exchanges, SEBI has examined the applicabilityof Rule 8(1)(f) and 8(3)(f) of the Securities Contract (Regulation) Rules, 1957, relating to Fund Based Activities ofBrokers. It has been opined that borrowing and lending of funds, by a trading member, in connection with or incidentalto or consequential upon the securities business, would not be disqualified under Rule 8(1)(f) and 8(3)(f).

Yours sincerely,

M.D. PATELEXECUTIVE DIRECTORSECONDARY MARKET DEPARTMENT

cc : a] Chairman’s Secretariat.

b] All Executive Directors, Division Chiefs and Regional Managers of SEBI.

c] All SEBI Nominee Directors on the Board of Exchanges.

d] All Division Chiefs requested to circulate to all their officers.

175

Notice no : 20021001-5Notice date : Tuesday, October 01, 2002Subject : APPOINTMENT OF COMPLIANCE OFFICERSegment Name : Equity

CONTENTS :

1st October, 2002

Sub : APPOINTMENT OF COMPLIANCE OFFICER

Members of the Exchange were informed vide notice no 126611/2002 dated 20th June, 2002 that appointment of aCompliance Officer is mandatory as per Regulation 18A of the SEBI (Stock Brokers and Sub-brokers) Regulations,1992. The concerned Compliance Officer will be responsible for monitoring the compliance by the concerned memberin respect of the SEBI Act, 1992, Rules, Regulations, notifications, guidelines, instructions, etc issued by SEBI / CentralGovernment. Monitoring investors’ grievances redressal and independently reporting to the Board any non-complianceobserved by him is also the responsibility of the Compliance officer.

Members were also requested to fill in the attached form and keep the Exchange informed of the appointment of aCompliance officer.

It is observed that many members have not yet submitted the requisite details, In view of the above, those memberswho have not yet submitted the details regarding Compliance Officer are requested to fill in the attached form andsubmit it to the Exchange on or before 14th October, 2002.

It is necessary that the Exchange is also informed of change, if any, in the compliance officer by duly filling in a newform.

Sunil VichareGM - Membership Services

176

New Form Format for Appointment of Compliance Officer

ON MEMBER’S LETTERHEAD

The Deputy General ManagerMembership DepartmentBSE, 25th FloorPJ Towers, Dalal StreetMumbai-40001

Sub : Appointment of Compliance Officer

Dear Sir/ Madam

I/We have appointed Shri./Ms. as our Compliance officer in keeping with the Regulation 18A of theSEBI (Stock Brokers and Sub-brokers) Regulations, 1992.

$We wish to inform you that Shri./Ms. is a new appointment with effect from / is a replacement in placeof Shri./Ms. who has ceased to be our compliance officer with effect from

Information on the Compliance Officer is as below :

I/We hereby undertake that we will keep the Exchange informed of any future change in the compliance officer.

Yours faithfully Counter signed by

For(name of the member)

Signature of Member/ Director Signature of the Compliance Officer

$ Strike off what is not applicable to you

Name of the new Qualification Hotline No. Tele. No Office Address Name of Residential Previous Employmentcompliance officer Father/ Relative Name of thepointed organisation

177

Notice no : 104615/2001Notice date : Monday, November 12, 2001Subject : ADVERTISEMENT BY BROKERS/SUB-BROKERS

CONTENTS :

Sub : Advertisement by brokers/sub-brokers

Members may kindly note that the BSE has been vetting advertisements pertaining to their firms after ensuring thatthe said advertisements are in conformity with regulation 17 and Bye-Law-358 of the Rules Bye- Laws and Regulationsof the Exchange as well as per Clauses C(4) and C(5) of the Code of Conduct specified in Schedule II of Regulation7 and clauses C(5) and C(6) of the Code of Conduct specified in Schedule II of Regulation 15 of SEBI (Stock Brokers& Sub-brokers) Regulations, 1992 respectively which are summarised as under :

Clause C (4) of the Code of Conduct for Stock Brokers, specified in Schedule II of Regulation 7 of SEBI (Stock Brokersand Sub-brokers) Regulations, 1992 states that a stock-broker shall not advertise his business publicly unless permittedby the stock exchange.

Clause C (5) of the Code of Conduct for Stock Brokers, specified in Schedule II of Regulation 7 of SEBI (Stock Brokersand Sub-brokers) Regulations, 1992 states that a stock-broker shall not resort to unfair means of inducing clients fromother stock brokers.

Clause C (5) of the Code of Conduct for Sub-brokers, specified in Schedule II of Regulation 15 of SEBI (Stock Brokersand Sub-brokers) Regulations, 1992 states that a sub-broker shall not advertise his business publicly unless permittedby the stock exchange.

Clause C (6) of the Code of Conduct for Sub-brokers, specified in Schedule II of Regulation 15 of SEBI (Stock Brokersand Sub-brokers) Regulations, 1992 states that a sub-broker shall not resort to unfair means of inducing clients fromother brokers.

Please find enclosed herewith copy of circular no. SMDRP/POLICY/CIR-49/2001 dated October 22, 2001, issued bySEBI, on the above matter, the contents of which are self-explanatory.

We are also enclosing extracts of Regulation 17 and Bye- law 358, of Rules, Bye-laws and Regulations of the Exchange,for your ready reference.

All are requested to conform to the attached Circular of SEBI failing which the Exchange will be constrained to takenecessary actions against erring members as per the Rules, Bye- Laws and Regulations of the Exchange.

Hema SrinivasanDGM – Membership

178

REGULATION 17 of the Regulations of the Exchange.

GUIDELINES FOR ADVERTISEMENTS BY MEMBERS

17.1 The content of the advertisements, brochures, etc. should be related only to the nature of services that stockbrokercan offer in respect of sales and purchase of shares and securities only. The advertisement should not containrecommendations regarding purchase or sale of any particular share or security of any company and, or, anyrecommendation regarding any company.

17.2 The advertisement can be published by a member-broker individually or jointly with other member-brokers so asto enable small brokers to pool their resources for publicity.

17.3 The advertisement should mention the name/title as recorded for the membership of the Stock Exchange alongwiththe code number allotted by the Securities and Exchange Board of India. It can also include the names of the sub-brokers affiliated with the broker. The broker should also designate and authorise and name the authorised personin the publication to ensure the correctness of the information given in the advertisement and prior approval of theStock Exchange should have been obtained in respect of such authorized person. The authorised person will bespecifically responsible when two or more brokers jointly advertise for brokerage business.

17.4 (a) The members should ensure that any information given in the advertisement must be correct and accurateand contain matters of objectivity ascertainable facts which should be capable of substantiation.

(b) It should not have any adverse reference direct or indirect regarding the reputation of the other members ofthe Stock Exchange and also of the Stock Exchange.

(c) The advertisement should not contain anything which is otherwise prohibited for publication under therelevant Act, unwarranted, misleading information or make any promises. 2{}

17.5 The Advertisement should not include publicity for any party other than the member himself and it should notcontain any reference to any person, firm or institution except as provided for in Regulations 17.2 and 17.3.

17.6 The member-broker should not allow his or his firm’s name to be advertised by others or allow his or his firm’sname to be published in the advertisement of others, except as provided for in Regulations 17.2 and 17.3.

17.7 The member broker should submit a copy of the advertisement to the Stock Exchange authorities and Securitiesand Exchange Board of India as soon as it is published. The Exchange Authorities will have the cease and desistpowers in this behalf.

17.8 If a member-broker violates any of the above Regulations for the advertisement, he is liable to be penalised forthe same by the Stock Exchange authorities and/or SEBI.

17.9 If the Stock Exchange authorities levy any penalty or take any disciplinary action against the member-broker, e.g.by way of suspension or declaring him as defaulter etc., it should be immediately made public by the StockExchange authorities, and the concerned member-broker should not advertise during the period of suspension.

1 Inserted by Governing Board Resolution dated 15.2.93

2 Amended by Governing Board Resolution dated 2.3.2000 and approved by SEBI on 3.5.2000

Extract of Bye-law 358 (xi)

Advertisement

(xi) if he advertises for business purposes or issues regularly circulars or business communications to persons otherthan his own constituents, members of the Exchange, banks and Joint Stock Companies or publishes

pamphlets, circulars or any other literature or report or information relating to the stock markets in the public printswith his name attached unless such advertisements, circulars or other business communications,

179

pamphlets, circulars or other literature or report or information relating to the stock markets and the materialcontained therein are in accordance with the provisions and guidelines as laid down in the relative Regulation2 orsuch other guidelines as Governing Board may from time to time prescribe in addition thereto or in modification orsubstitution thereof.

180

Notice no : 20040117-8Notice date : Saturday, January 17, 2004Subject : Review of norms relating to trading by members/ sub-brokersSegment Name : General

CONTENTS :

Members of the Exchange are hereby informed that the Securities and Exchange Board of India, vide letter Ref. No.SEBI/MIRSD/Cir-06/2004 dated January 13, 2004 has reviewed the norms relating to trading by members / sub-brokers.The contents of the circular are reproduced below :

1. During the course of inspections carried out by SEBI of the books of accounts and other documents of members/sub-brokers, it has been observed that certain members/sub-brokers are dealing through a large number of otherstock brokers/sub-brokers of the same exchange/other exchange for their proprietary trades as well as trades onbehalf of clients.

2. Trading through large number of brokers/sub-brokers raises serious issues of regulatory concerns including takingexcessive exposure, executing pro account trading from multiple locations in violation of SEBI circular no. SEBI/MRD/SE/Cir-32/2003/27/08 dated August 27, 2003, possibility of over leveraging and default etc.

3. With a view to address these concerns, stock exchanges are directed to ensure the following :-

3.1 A Stock broker/sub-broker of an exchange cannot deal with brokers/sub-brokers of the same exchangeeither for proprietary trading or for trading on behalf of clients, except with the prior permission of theexchange. The stock exchanges while giving such permission, shall consider the reasons stated by thebrokers/sub-brokers for dealing with brokers/sub-brokers of the same exchange and after carrying out duediligence allow such brokers/sub-brokers to deal with only one stock broker/sub-broker of the same exchange.

3.2 A stock broker/sub-broker of an exchange can deal with only one broker/sub-broker of another exchangefor proprietary trading after intimating the names of such stock broker/sub-broker to his parent stock exchange.

3.3 As per Regulation 15(1) (e) of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 a sub-brokershall not be affiliated to more than one stock broker of one stock exchange. It is reiterated that a stockbroker of an exchange can deal with only one broker of another exchange on behalf of clients after obtainingnecessary registration as a sub-broker.

4. Stock Exchanges are directed to implement the above requirement with immediate effect and take necessarydisciplinary action wherever violation of the above provisions are observed.

5. The undersigned has been authorized to direct the exchanges to

5.1 make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of theabove decision immediately.

5.2 bring the provisions of this circular to the notice of the member brokers/sub-brokers affiliated to the membersof the exchange and also to disseminate the same on the web-site.

5.3 communicate to SEBI, the status of the implementation of the provisions of this circular in the MonthlyDevelopment Report for the month of January 2004.6. This circular is being issued in exercise of powersconferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with Section10 of the Securities Contracts (Regulation) Act 1956, to protect the interests of investors in securities and topromote the development of, and to regulate the securities market.

Yours faithfully,

Usha NarayananMembers are requested to take note of the above.

Kevin DesouzaCGM – Membership & Inspection

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Notice no : 20050902-21Notice date : Friday, September 02, 2005Subject : Compliance Requirements for Trading MembersSegment Name : General

Trading Members of the Exchange are hereby informed that compliance with respect to the following should be dulyensured.

1. Trading Members should ensure that there are no unauthorised extensions of their trading terminals. In case ofany unauthorised extension of terminals, concerned trading members will be fully responsible and shall be heldliable for strict disciplinary action including de-activation of terminals.

2. Trading members should place a permanent notice board which is prominently displayed at all their offices includingthe offices of sub-brokers, or any other offices where the trading terminals are located by September 30, 2005urging the investors to follow certain Do’s and Don’ts while investing/trading in the stock markets: The format ofthe notice board along with the list of general Do’s and Don’ts are given in Annexure I. The size and font of thecontents of the notice board should be such as would make the subject matter legible and easily readable toeverybody.

3. Trading Members are also required to ensure that the copy of their SEBI Registration Certificate is prominentlydisplayed in all their offices by September 30, 2005.

4. Trading Members shall also ensure that the SEBI Registration Certificate issued to the sub-broker is prominentlydisplayed at all their sub-broker’s offices by September 30, 2005.

If notice board and copies of the SEBI Registration Certificates are not found as mentioned above, suitable disciplinaryaction will be taken against the concerned trading members.

Trading Members are further advised to bring the contents of this circular to the notice of all their employees, sub-brokers, remisiers, clients etc., and educate them to not to allow or indulge in any activities which are not in conformitywith the Rules, Byelaws, Regulations of the Exchange and the various circulars issued by the Exchange and SEBIfrom time to time.

For further clarifications, if any, trading members may contact any of the following officials :

Sr. No. Name of the Official Intercom No.

1 Ashwin Dattani 8157

2 Shaila Valsan 8316

3 Sanjay Pai 8356

P. K. Ramesh Kritika DagaDeputy General Manager Assistant General ManagerSurveillance and Supervision Surveillance & Supervision

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DO’Sa. Always deal with market intermediaries registered with SEBI/Exchanges.

b. Give clear and unambiguous instructions to your broker/agent/depository participant.

c. Always insist on contract notes for all the transactions from the main broker (name to be specified) within 24 hoursof the trade execution. In case of doubt of the transactions, verify the genuineness of the same on the Exchangewebsite www.bseindia.com.

d. Always settle the dues through the normal banking channels with the market intermediaries.

e. Always make payment directly to the main broker (name to be specified).

f. Always give delivery of shares directly to the main broker (name to be specified).

g. Adopt trading/investment strategies commensurate with your Risk bearing capacity as all investments carry risk,the degree of which varies according to the investment strategy adopted.

h. Always sign a Member-Client Agreement or the tripartite agreement with the trading member & SEBI registeredsub-broker of the trading member of BSE as the case may be.

i. Please carry out due-diligence before registering as client with any Intermediary. Also, carefully read and understandthe contents stated in the Risk Disclosure Document, which forms the part of client registration for dealing throughintermediaries in the Stock Market.

DON’TS

a. Don’t deal with unregistered brokers/sub-brokers, intermediaries.

b. Don’t leave the custody of your Demat Transaction slip book in the hands of any Intermediary.

c. Don’t fall prey to promises of guaranteed returns.

d. Don’t blindly imitate investment decisions of others who may have profited from their investment decisions.

1. Name of the Trading Member of BSE (SEBI Registration No.)

2. Address & Tel. No. of the Main office of the trading member(Also Name & Tel. No of the contact person in the main office

3. SEBI Registration No. of the trading member

4. BSE Investor Service Cell Tel. No. 022 - 22721233/34

Annexure 1

Bombay Stock Exchange Limited

The edge is efficiency

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Notice no : 20070131-11Notice date : Wednesday, January 31, 2007Subject : SEBI Circular No./MRD/DoP/Dep/SE/Cir-22/06 dated 18th December, 2006 ( for registered

brokers and sub-brokers)Segment Name : General

CONTENTS :

Subject : SEBI Circular No./MRD/DoP/Dep/SE/Cir-22/06 dated 18th December, 2006 ( for registered brokers and sub-brokers).

Exclusive e-mail ID for redressal of Investor Complaints.

Segment Name: General

Trading members of the Exchange are hereby informed that Securities and Exchange Board of India ( SEBI ), in exerciseof the powers conferred by Section 11 (1) of Securities and Exchange Board of India Act, 1992, advised to all registeredbrokers and registered sub-brokers, vide its captioned Circular to designate e-mail IDs of their respective grievanceredressal division and / or of their compliance officers exclusively for the purpose of registering complaints by investorsand display such e-mail IDs and other relevant details prominently on their websites and in the various materials /pamphlets / advertisement campaigns initiated by them for creating investor awareness.

Trading Members of the Exchange are requested to comply with the provisions of the above mentioned SEBI Circular.

Arun K. DolasDy. Gen. ManagerDepartment of Investor Services.

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Notice no : 20060321-15Notice date : Tuesday, March 21, 2006Subject : Guidelines on Anti Money Laundering StandardsSegment Name : General

CONTENTS :

Attention of the trading members is drawn to Exchange Notice No. 20060120-6 dated January 20, 2006 wherebyGuidelines on Anti Money Laundering Standards as advised by SEBI vide circular number ISD/CIR/RR/AML/1/06 datedJanuary 18, 2006 were circulated to the members for necessary action.

SEBI vide circular no. ISD/CIR/RR/AML/2/06 dated March 20, 2006 has advised the reporting requirements and theobligations cast on the intermediaries under the Prevention of Money Laundering Act, 2002 and the rules notified thereunder.

A copy of the aforesaid SEBI circular dated March 20, 2006 is enclosed herewith. SEBI circular is also available onthe SEBI website www.sebi.gov.in.

All Trading Members and the Sub-Brokers are advised to take note of the above SEBI circular.

Sanjiv Kapur P. K. RameshGeneral Manager Dy. General ManagerSurveillance and Supervision Surveillance and Supervision_______________________________________________________________________________________________________

CHIEF GENERAL MANAGER

INTEGRATED SURVEILLANCE DEPARTMENT

EMAIL - ravi@sebi.gov.in

TEL : 022 22835701

Fax : 022 22870966

ISD/CIR/RR/AML/2/06

March 20, 2006

To all Intermediaries registered with SEBI under Section 12 of the SEBI Act.

(Through the stock exchanges for stock brokers, sub brokers and depositories for depository participants)

Dear Sir / Madam,

Sub: - Prevention of Money Laundering Act, 2002, Obligations of intermediaries in terms ofRules notified thereunder

1. Please refer to our circular no. ISD/CIR/RR/AML/1/06 dated January 18, 2006 laying down broad guidelines onAnti Money Laundering Standards. As per the circular, all the intermediaries registered with SEBI under Section12 of the SEBI Act were advised to ensure that a proper policy framework on anti-money laundering measures isput into place within one month from the date of the circular. The intermediaries were also advised to designate anofficer as 'Principal Officer' and intimate their details to the Financial Intelligence Unit, India on an immediatebasis.

2. It is brought to the attention of all the intermediaries that the Government of India, Ministry of Finance, Departmentof Revenue has issued notifications dated July 1, 2005 and December 13, 2005 in the Gazette of India, notifyingthe Rules under the Prevention of Money Laundering Act (PMLA), 2002. In terms of the Rules, the provisions ofPMLA, 2002 came into effect form July 1, 2005. Section 12 of the PMLA, 2002 casts certain obligations on the

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intermediaries in regard to preservation and reporting of certain transactions. Intermediaries are therefore, advisedto go through the provisions of PMLA, 2002 and the Rules notified there under and take all steps considerednecessary to ensure compliance with the requirements of section 12 of the Act ibid.

3. Maintenance of records of transactions

All the intermediaries shall put in place a system of maintaining proper record of transactions prescribed underRule 3, as mentioned below:

(i) all cash transactions of the value of more than rupees ten lakh or its equivalent in foreign currency;

(ii) all series of cash transactions integrally connected to each other which have been valued below rupees tenlakh or its equivalent in foreign currency where such series of transactions have taken place within a monthand the aggregate value of such transactions exceeds rupees ten lakh;

(iii) all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuineand where any forgery of a valuable security has taken place;

(iv) all suspicious transactions whether or not made in cash and by way of as mentioned in the Rules.

4. Information to be maintained

Intermediaries are required to maintain and preserve the following information in respect of transactions referredto in Rule 3:

(i) the nature of the transactions;

(ii) the amount of the transaction and the currency in which it was denominated;

(iii) the date on which the transaction was conducted; and

(iv) the parties to the transaction.

5. Maintenance and Preservation of records

Intermediaries should take appropriate steps to evolve an internal mechanism for proper maintenance andpreservation of such records and information in a manner that allows easy and quick retrieval of data as and whenrequested by the competent authorities. Further, the records mentioned in Rule 3 have to be maintained andpreserved for a period of ten years from the date of cessation of the transactions between the client and intermediary.

Intermediaries should formulate and implement the client identification program containing the requirements aslaid down in Rule 9 and such other additional requirements that it considers appropriate. The records of theidentity of clients have to be maintained and preserved for a period of ten years from the date of cessation ofthe transactions between the client and intermediary.

6. Reporting to Financial Intelligence Unit-India

In terms of the PMLA rules, intermediaries are required to report information relating to cash and suspicioustransactions to the Director, Financial Intelligence Unit-India (FIU-IND) at the following address:

Director, FIU-IND,Financial Intelligence Unit-India,6th Floor, Hotel Samrat,Chanakyapuri,New Delhi-110021.

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Intermediaries should carefully go through all the reporting requirements and formats enclosed with this circular.These requirements and formats are divided into two parts- Manual Formats and Electronic Formats. Details ofthese formats are given in the documents (Cash Transaction Report- version 1.0 and Suspicious TransactionsReport version 1.0) which are also enclosed with this circular. These documents contain detailed guidelines on thecompilation and manner/procedure of submission of the manual/electronic reports to FIU-IND. The related hardwareand technical requirement for preparing reports in manual/electronic format, the related data files and data structuresthereof are also detailed in these documents. Intermediaries, which are not in a position to immediately file electronicreports, may file manual reports to FIU-IND as per the formats prescribed. While detailed instructions for filing alltypes of reports are given in the instructions part of the related formats, intermediaries should adhere to thefollowing:

(a) The cash transaction report (CTR) (wherever applicable) for each month should be submitted to FIU-INDby 15th of the succeeding month.

(b) The Suspicious Transaction Report (STR) should be submitted within 7 days of arriving at a conclusion thatany transaction, whether cash or non-cash, or a series of transactions integrally connected are of suspiciousnature. The Principal Officer should record his reasons for treating any transaction or a series of transactionsas suspicious. It should be ensured that there is no undue delay in arriving at such a conclusion.

(c) The Principal Officer will be responsible for timely submission of CTR and STR to FIU-IND;

(d) Utmost confidentiality should be maintained in filing of CTR and STR to FIU-IND. The reports may betransmitted by speed/registered post/fax at the notified address.

7. Intermediaries should not put any restrictions on operations in the accounts where an STR has been made.Further, it should be ensured that there is no tipping off to the client at any level.

8. Reporting of 'Principal Officer' details to FIU -India

It has been brought to the notice of SEBI by FIU-IND that a large number of entities have not submitted details oftheir 'Principal Officer' to FIU-IND as required by the SEBI circular no. ISD/CIR/RR/AML/1/06 dated January 18,2006. All the Intermediaries, which have yet not reported these details to FIU-IND are directed to do so forthwith.

9. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and ExchangeBoard of India Act, 1992, and Rule 7 of Prevention of Money-laundering (Maintenance of Records of the Natureand Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information andVerification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutionsand Intermediaries) Rules, 2005 to protect the interests of investors in securities and to promote the developmentof, and to regulate the securities market.

Yours faithfully,

R RAVICHANDRAN

187

Notice no : 20070330-27Notice date : Friday, March 30, 2007Subject : Client Registration Form/ Know Your Client (KYC) requirements & Compliance with

Guidelines on Anti Money Laundering StandardsSegment Name : General

CONTENTS :

Attention of the Trading Members is drawn to the Exchange Notice no. 20040827-11 dated August 27, 2004 and Noticeno. 20061120-9 dated November 20, 2006 wherein Trading Members were advised to ensure that the Client RegistrationForm / Know Your Client (KYC) forms are complete in all respects and are reviewed and updated periodically. TheTrading Members were also advised to ensure that Client Registration details including financial details of the clientsare correctly obtained and updated periodically and is used to monitor the trading activities of their clients.

It has been observed during the course of routine investigations that:

l Some KYC forms are incomplete

l In a few cases, prima facie, trading activity of the client is disproportionate to the financial status disclosed in theKYC forms and supporting documents

l Updated annual financial statements are not obtained and complete documentation is not being maintained fornon - individual clients

Attention of the Trading Members is also drawn to Exchange Notice no. 20060120-6 dated January 20, 2006 andNotice no. 20060321-15 dated March 21, 2006 wherein Guidelines on Anti Money Laundering Standards issued bySEBI vide their Circular no. ISD/CIR/RR/AML/1/06 dated January 18, 2006 and Circular no. ISD/CIR/RR/AML/2/06dated March 20, 2006, were communicated to the Trading Members.

The Guidelines on Anti Money Laundering Standards, inter-alia require the Trading Members to:

l Ensure Customer due diligence (As stipulated under Guideline 5 of Part II of the Guidelines on Anti MoneyLaundering Provisions).

l Monitor and Report Suspicious Transactions to FIU (Financial Intelligence Unit) India. (As specified under Guidelines2.2 and 9 of Guidelines on Anti Money Laundering Provisions in the formats as communicated to the TradingMembers vide Exchange Notice no. 20060321-15 dated March 21, 2006).

The Trading Members are therefore, once again advised to ensure strict compliance with the requirements of the KYCnorms and the PMLA (Prevention of Money Laundering Act ,2002) Guidelines, including reporting of any suspicioustransactions to the FIU.

Kritika Daga Pankaj GuptaDy. General Manager Asst. General Manager(Surveillance and Supervision) (Surveillance and Supervision)

188

Notice no : 20080211-19Notice date : Monday, February 11, 2008Subject : Client Margin InformationSegment Name : General

CONTENTS :

To

Member brokers

The member brokers of the Exchange are hereby informed that at present reports are being downloaded to memberbrokers on a daily basis, which give the client-wise details of VaR, ELM and Mark To Market margins levied by theExchange.

As per the directions of SEBI, the member brokers are now advised to inform their clients about the margins levied ontheir traded positions on a day-to-day basis by way of either sending the margin information through email or alongwith the physical contract notes. The member brokers are also advised to include the following information in thestatements being provided to their Clients:

l Total collateral deposits placed by the client upto day T-1 (with break-up in terms of cash, FDRs, BGs and securities)

l Collateral deposits utilised towards margins upto the end of T-1

l Collateral deposits placed by the client on day T (with break-up in terms of cash, FDRs, BGs and securities)

l Margin adjustments for T day

l Collateral status (balance with the member / due from the client) at the end of T day

The member brokers are required to comply with the said requirements with effect from February 18, 2008.

For any clarifications member brokers may contact the following Exchange officials:

Mr.Mitesh Thakkar and Mr. Nitesh Agarwal

Phone Nos.- 22721233/34 Ext - 8879/8354

P K Ramesh Yogesh BambardekarGeneral Manager ManagerSurveillance and Supervision Surveillance and Supervision

189

Notice no : 104616/2001Notice date : Monday, November 12, 2001Subject : SEBI CIRCULAR ON TRADING TERMINALS

CONTENTS :

SEBI Circular on Trading Terminals

Members of the Exchange, whilst applying for Trading terminals through VSAT/ WAN/ LAN/ Lease Line, etc. undertaketo abide by all the terms and conditions stated in the application form provided to them by BSE. One of the importantconditions, enumerated in the application form, is that the Trading terminals will be installed at members’ office and anoffice will be considered a members’ office only if it is rented/ owned /licensed by a BSE member. Further, the staffoperating BOLT terminal in the members’ offices must be on a member’s payroll.

In fact members should have effective control over the functioning of those offices. Please refer to Exchange NoticeNo.56712/2000 dated 20th July, 2000 on the above subject.

SEBI’s recent circular, bearing No.SMDRP/Policy/CIR-49/2001 dated October 22, 2001 (enclosed) is on the abovematter.As per the said SEBI circular, the members should install trading terminals only at members’ registered offices,branch offices and their registered sub-brokers’ offices and they should not allow the trading terminals to be misutilisedfor unregistered sub-broking activities. The members are therefore advised that the trading terminals, if any, grantedearlier in places other than the above mentioned places, should be withdrawn immediately and members must ensurethat such errors do not occur in future.

All are requested to conform to the attached Circular of SEBI failing which the Exchange will be constrained to takenecessary actions against the erring members.

Hema SrinivasanDGM - Membership

190

Notice no : 20030909-1Notice date : Tuesday, September 09, 2003Subject : Pro-account trading terminalSegment Name : General

CONTENTS :

The Exchange has been advised by SEBI vide circular no. SEBI/MRD/SE/Cir-32/2003/27/08 dated August 27, 200regarding proprietary trading terminals.

1. During the course of inspections carried out by SEBI and stock exchanges of the books of accounts and otherdocuments of members, it has been observed that certain members are putting large number of orders on pro-account from various locations rather than using pro-account / own Account at the terminals located at the corporateoffice from where the owner / directors normally function. It has further been observed that these trades executedfrom various locations under pro-account / own account are, many a time, transferred subsequently to the respectiveclients in the back office of the members. This practice is in clear violation of the requirement of putting the ordersof clients under the appropriate client code through trading terminals.

2. With a view to check such misuse of the above facility, if any, the following has been decided:-

a) Facility of placing orders on own account through trading terminals shall be extended only at one location ofthe members as specified / required by the members

b) Trading terminals located at places other than the above location shall have a facility to place orders only forand on behalf of a client by entering client code details as required / specified by the Exchange / SEBI.

c) In case any member requires the facility of using own account through trading terminals from more than onelocation, such member shall be required to submit an undertaking to the stock exchange stating the reason forusing the own account at multiple locations and the Exchange may, on case to case basis after due diligence,consider extending the facility of allowing use of own account from more than one location.

The above requirements comes into immediate effect. The members are requested to indicate to the Exchange, theIDs of the trading terminals which will be used to place orders on ‘Own Account’ within 5 days but not later thanSeptember 13, 2003.

For any clarification in the matter, members may contact any of the following officials.

Sr.No. Name Intercom No.

1. Mr. Ranjan Prabhu 8214

2. Mr. Bharat Dave 8150

All the members are requested to co-operate and ensure compliance.

Kevin Desouza Mayank MehtaChief General Manager Asst. General ManagerInspection & Membership Membership

191

Notice no : 20040205-13Notice date : Thursday, February 05, 2004Subject : Operate of Bolt terminals by RemisierSegment Name : General

CONTENTS :

NOTICE

Members of the Exchange may kindly note that the Governing Board has authorised Remisiers to operate BOLTterminals at members office only. However it is clarified that at present, BOLT terminals cannot be installed at Remisier’sOffice in view of SEBI circular no SMDRP/Policy/Cir-49/2001 dated October, 22, 2001 which states that BOLT terminalsshould be installed at Members Offices’ or their associated Sub-Brokers offices only.

In case members require any further clarifications, they may please contact the following officials of the MembershipDepartment.

Name Extension

Rakesh Parekh 8307

Joy Benson 8277

Kevin DesouzaCGM - Membership and Inspection

192

Notice no : 20050808-26Notice date : Monday, August 08, 2005Subject : Uploading IML/TWS Location InformationSegment Name : General

Sub : Uploading IML/TWS Location Information

1. The Exchange had been permitting addition of new trading terminals and also installation of IML terminals forbusiness expansion of members. The Exchange vide its Notices (1) No.20030827-25 dated August 27, 2003, (2)No.20041210-13 dated December 10, 2004 and (3) No.20050118-3 dated January 18, 2005 required the membersto execute Affidavit-cum-Undertaking regarding use of the IML software.

2. The persons who operate the trading / IML terminals of the members are known as approved users and allinformation regarding such approved users should be duly submitted to the Exchange. Approved user refers toemployees of the member, sub-brokers of the member and remisiers operating from the member’s office. Noother person can be approved user for operating the trading / IML terminals.

3. Members are also required to note that the trading / IML terminals should be located only at their Head office,Registered offices, branches or at the offices of their registered sub-brokers.

4. Members may please note that the BOLT TWS Version No. 35 has a facility to upload the TWS / IML Id details tothe Exchange. Accordingly, members are requested to upload the details of TWS / IML ids, being allotted to themembers. Please note that the details submitted will be audited by the Department of Surveillance and Supervisionof the Exchange, hence, members should ensure that the details submitted are correct and complete.

5. Member must provide the information for all his TWS / IML Ids. The information related to IML Ids must include thedetails of all the users/traders using that particular IML Id e.g. if IML ID 201 is used by 5 users/traders then thedetails of all these 5 users/traders must be submitted. Members are requested to get the advice from their respectiveIML vendors for providing this information. Members are also advised to use this facility for any changes / addition/ de-activation of the TWS / IML Ids in future and ensure up-to-date information provided to the Exchange.

6. The data relating to the existing trading / IML terminals must be submitted to the Exchange through BOLT TWS asdescribed here under on or before August 16, 2005.

(i) Please note that only TWS no. 1 is allowed to use this facility of addition/updation/deactivation/activation ofTWS / IML information on the BOLT.

(ii) For uploading the details of your TWS / IML Ids, members are advised to use CR Icon (Shift + F4) of BOLTTWS.

(iii) Members are requested to refer to Annexure I for providing field wise information.

(iv) Apart from manually entering the information, system provides a facility of Batch Upload for submitting themultiple entries. Please refer Annexure II for file format of batch entry.

(v) Refer Annexure III for vendor code information.

7 Members may note that any trading terminals / IML terminals allotted and particulars of which are not madeavailable/updated as above shall be treated as unauthorized terminals. Non-reporting/wrong reporting shall beconsidered as a violation and render the concerned members liable for disciplinary action as may be deemed fitincluding withdrawal of IML/additional terminals.

For further clarifications, members may contact any of the following officials:

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Sr. No. Name Department Intercom No.

1 Sandeep Gupta Surveillance & Supervision 8153

2 Dilip Oak (For technical queries only) Operations & Trading 8314

P. K. Ramesh Kritika DagaDeputy General Manager Assistant General ManagerSurveillance and Supervision Surveillance & Supervision

194

Notice no : 20050930-13Notice date : Friday, September 30, 2005Subject : Uploading IML/TWS Location InformationSegment Name : General

The Exchange had issued Notice No. 20050808-26 dated August 08, 2005, Notice No.20050816-9 dated August 16,2005, Notice No.20050819-19 dated August 19, 2005 and Notice No.20050823-20 dated August 23, 2005 throughwhich all the trading members were advised to upload the details regarding the location of TWS/IML terminals operatedby them.

An analysis of the data uploaded by the trading members has revealed that some of the trading members have uploadedexcess/short or inaccurate information about the trading terminals. Trading members of the exchange are hereby requiredto verify the data uploaded / registered by them and ensure correctness of the same by October 17, 2005. Tradingmembers are required to take particular note of the following while uploading / registering the TWS / IML information.

1. Ensure that all the TWS ids i.e. BOLT ids which are displayed in your Admin terminal (TWS No. 0) are registered/ uploaded through TWS No. 1 as TWS entry only and not as IML entry. The information uploaded / registeredshould cover all TWS ids allotted by the Exchange whether active or not.

2. Trading members are required to upload / register all the IML ids allotted by the Exchange and also the extensionsgiven through these IML ids. The data uploaded related to IML extensions i.e. Branch code, Dealer code etc. willbe required by your IML vendor for tagging the location id details along with the orders entered into the tradingterminals. Hence, trading members are requested to correct the data and download the same for providing it tothe respective IML vendor. For further clarifications in this regard, please contact your IML vendor.

3. It has been observed that some of the trading members have registered TWS ids as IML ids and vice-versa byselecting incorrect user type. Trading members are required to ensure that every entry is marked correctly and thedata uploaded by them is correct in all respects.

4. Trading members who have entered incorrect data into the system, are required to correct the data as under:

a. Download the information submitted and save / print it.

b. Verify the data and select the incorrect entries uploaded in the system through your TWS no. 1

c. Mark all the incorrect entries as inactive by selecting the option “No” on the second page of the softwareunder the key “Active Terminal : Yes or No”

d. Re-submit the correct entries with proper user type i.e. TWS or IML. Also ensure that the new data, whichis uploaded in the system, is correct in all respects.

5. It is also observed that some of the trading members have still not registered / uploaded the TWS and IML idsinformation. Such members are advised to immediately register / upload the required information; failing which,the Exchange will take a serious view of the matter.

Trading members are once again informed that the persons who operate the trading / IML terminals of the membersare known as approved users and all information regarding such approved users should be duly submitted to theExchange. Approved user refers to employees of the member, sub-brokers of the member and remisiers operatingfrom the member’s office. No other person can be approved user for operating the trading / IML terminals. Also,trading members should note that trading / IML terminals should be located only at their Head office, Registeredoffices, branches or at the offices of their registered sub-brokers.

Trading members must note that registering / uploading the details of trading terminals is a regulatory requirementand hence strict disciplinary action will be taken against the trading members if they fail to upload the data orupload incorrect data.

195

Please contact Help Desk for clarification, if any. Also members may contact on 22721233 (Extension 8190, 8776, 8252)

Help Desk Nos.

Ethernet users - Extension 5000 (Hunting)Lease line users - (022) 2272 2575 (Hunting)Vsat users - Toll free hunting 1600 22 6661

(Outside Mumbai only),022 2272 3213 (Cities with no toll free service)

P. K. Ramesh Dilip OakDeputy General Manager Deputy General ManagerSurveillance and Supervision Operations and Trading

196

Notice no : 20051004-13Notice date : Tuesday, October 04, 2005Subject : Uploading IML/TWS Location InformationSegment Name : General

The Exchange had issued Notice No. 20050808-26 dated August 08, 2005, Notice No.20050816-9 dated August 16,2005, Notice No.20050819-19 dated August 19, 2005 and Notice No.20050823-20 dated August 23, 2005 throughwhich all the trading members were advised to upload the details regarding the location of TWS/IML terminals operatedby them.

An analysis of the data uploaded by the trading members has revealed that some of the trading members have uploaded‘Nature of Office’ as ‘other’ i.e. other than at the registered / head offices, branch offices and sub-brokers offices. Inthis connection, attention of the trading members is once again invited to the Exchange Notice No. 104616/2001 datedNovember 12, 2001 and Notice No. 20021217-18 dated December 17, 2002 wherein all the trading members wereadvised to install the trading terminals only at the members’ registered offices, branch offices and their registered sub-brokers’ offices.

Trading members are therefore required to take utmost care while uploading the details into the system, as the Exchangeshall use the data for verification at the time of inspection / any other regulatory compliance. The Exchange shall takea serious view of the matter if any non-compliance is observed in this regard.

Trading members must note that registering / uploading the details of trading terminals is a regulatory requirementand hence strict disciplinary action will be taken against the trading members if they fail to upload the data or uploadincorrect data.

P. K. Ramesh Sandeep GuptaDeputy General Manager Deputy ManagerSurveillance and Supervision Surveillance and Supervision

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Notice No : 20050823-20Date : 23/08/2005Subject : TWS/IML Registration on BOLT and FAQ’s on the

sameDept Name : InspectionSegment Name : General

This is further to our Notice No. 20050818-26 dated August 8, 2005, Notice No. 20050816-9 dated August 16, 2005and Notice No.20050819-19 dated August 19, 2005 regarding uploading of information relating to location of IML/TWSterminals.

In view of the requests received from members the last date for submitting the details to the Exchange through BOLTTWS has now been extended to Tuesday, August 30, 2005.

We are also attaching herewith a list of FAQ’s, which will help the members in uploading the details on the BOLT.

Please contact Help Desk for clarification, if any. Also members may contact on 22721233 (Extension 8190, 8776,8252)

Help Desk Nos.

Ethernet users - Extension 5000 (Hunting)Lease line users - (022) 2272 2575 (Hunting)Vsat users - Toll free hunting 1600 22 6661 (Outside Mumbai only),

022 2272 3213 (Cities with no toll free service)

P. K. Ramesh Kritika DagaDGM AGMSurveillance and Supervision Surveillance & Supervision

Encl: a.a

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Frequently Asked Questions

1. User id Pin Code: is the pincode of the branch in case of IML or TWS location through which the orders arerouted to the Exchange.

2. TWS/IML ID: For TWS id, BOLT no. has to be entered and for IML id, branch code has to be entered which isallotted by the vendor.

3. User Id: For TWS, user id will be the same as TWS id. For IML, user id will be the dealer code allotted by the IMLvendor.

4. Prog Trd: If program-trading software is used then 1 has to be entered, and 0 if program-trading software is notused. Program trading is not yet operational in BSE, hence 0 option to be selected by all the members.

5. Vendor Code: Refer Annexure III of the Notice No. 20050808-26.

6. Regd. Office Address: It is the trading terminal location address.

7. Pin code: It is the pin code of the location where the trading terminal is actually location and from where the loginis done by the user.

8. Mapin ID: Optional

9. SEBI Reg. No.: Optional

10. Date of Activation: Optional

11. Date of Deactivation: Optional

12. Date of Birth: It is the birthdate of the approved user.(yyyy-mm-dd)

13. Residence Address: It is the address of the approved user.

14. Relation with approved user using TWS/IML: For employees of the sub-brokers, members should select sub-broker. For employees of remisiers, members should select authorised person. For directors of the corporateentity and proprietor and partners, members should select employees.

15. For every terminal there has to be an approved user.

16. Authorised person - is a term used here only for referring to a remisier.

17. First Name / Middle Name / Last Name- has to be of the individual user operating the terminal. In case of non-individual sub-broker, the name of the entity must be included in the address field.

18. Mode of Connectivity – for Ethernet connection within the stock exchange buildings select LAN option and forleased lines/MLDN connections select dial –up and if VSAT user select VSAT option.

19. For viewing the records uploaded, members can use the download button provided to them at the top of boththe screens by entering the start and end TWS/IML id. The same can be stored by right clicking on the TWS / IMLuser registration window Title bar, user will get the option “Save Reg.Users”, by this the records will be saved in*.urg file

20. As TWS no. 0 is not a trading terminal uploading the data for the same is optional. However, members who wantto upload the same may do so by entering TWS id as 0 and user id as 1.

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The Stock Exchange will arrange to disseminate the aforesaid information after compilation on the same day to thegeneral public through its website – www. bseindia.com (Circulars/Notices Section).

This notice is effective from Tuesday, February 17, 2004.

For any clarifications, members are advised to contact the following officers:

Mr. Kirit Mithiya (Extn 8599) / Mr. Neeraj Agarwal (Extn: 5093) and Mr. Ashit R. Raja (Extn: 5092).

Devika ShahGeneral Manager (Surveillance)

Notice no : 20040216-10Notice date : Monday, February 16, 2004Subject : Disclosure of trade details of bulk dealsSegment Name: Equity

CONTENTS :

SEBI vide its circular No. SEBI/MRD/SE/Cir-7/2004 dated January 14, 2004 has decided that members of the Exchangeshall make disclosures to the Exchange with respect to all transactions in a scrip where total quantity of shares bought/ sold is more than 0.5% of the number of equity shares of the company listed on the Exchange.

The relevant content of the SEBI circular is as below:

“Sub: Disclosure of trade details of bulk deals

1. With a view to imparting transparency in bulk deals so as to prevent rumours /speculation about such dealscausing volatility in the scrip price, it has been decided to bring about greater disclosure of such deals as mentionedbelow :

1.1. The disclosure shall be made with respect to all transactions in a scrip where total quantity of shares bought/soldis more than 0.5% of the number of equity shares of the company listed on the stock exchange.

1.2. The brokers shall disclose to the stock exchange the name of the scrip, name of the client, quantity of sharesbought/sold and the traded price.

1.3. The disclosure shall be made by the brokers immediately upon execution of the trade.

1.4. The Stock exchanges shall disseminate the aforesaid information on the same day after market hours to thegeneral public.”

Accordingly and after seeking necessary clarifications from SEBI, members are advised to send the undermentionedinformation :

1. Single Trade: Immediately upon the execution of the order where the traded quantity either buy or sell onaccount of any trade is more than 0.5% of the number of equity shares of the company listed on the stockexchange.

2. Cumulative Trades for the Day: Within one hour from the closure of the trading hours, where the cumulativequantity traded under any single client code on that day either purchase or sale is more than 0.5% of thenumber of equity shares of the company listed on the stock exchange.

The information is to be sent in the format given below on Fax No. 022-22723353, as under :

Sr.. No. Date of Scrip Scrip Client Buy (B) / Quantity Trade Price/ WeightageTrade Code Name Name Sell (S) Average Trade Price

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Notice no : 20040311-7Notice date : Thursday, March 11, 2004Subject : Disclosure of trade details of Bulk Deals and listed equity capital of the company.Segment Name: Equity

The Exchange vide its Notice No. 20040216-10 dated February 16, 2004, has advised the member – brokers to makedisclosure to the Exchange with respect to all transactions in a scrip where total quantity of shares bought / sold ismore than 0.5% of the company equity capital listed on the Exchange.

In continuation of above notice, the Exchange has now provided a facility to the member-brokers, to enable them toascertain the listed capital of the company, on their BOLT-TW(s) by downloading the file CIddmmyy.txt under the folderCapital of Companies in DLOAD. The format of file is as given below –

Scrip Code Scrip Name Number of shares in lacs

Recently, the Exchange has observed that on a few occasions members are reporting bulk deal transaction on a dayafter the actual transaction took place. In this connection members are once again advised to report –

(i) Single Trade: Immediately upon the execution of the order where the traded quantity either buy or sell on accountof any trade is more than 0.5% of the number of equity shares of the company listed on the Stock Exchange.

(ii) Cumulative Trades for the Day: Within one hour from the closure of the trading hour, where the cumulative quantitytraded under any single client code on that day either purchase or sale is more than 0.5% of the number of equityshares of the company listed on the Stock Exchange.

Devika ShahGen. Manager - Surveillance

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Notice no : 20040722-11Notice date : Thursday, July 22, 2004Subject : Disclosure of trade details of Bulk Deals through Data Upload System.Segment Name : Equity

Attention of the member-brokers is drawn to Exchange Notice No. 20040216-10 dated February 16, 2004, whereinmembers were advised to make disclosure to the Exchange with respect to all transactions in a scrip where total quantityof shares bought / sold is more than 0.5% of the listed equity capital of the company on the Exchange. The memberswere required to report the same to the Exchange by fax on No. 022-22723353.

2. In this connection, the members are advised that they can now report bulk deal transactions through DataUpload System (DUS) with effect from July 26, 2004. The detailed procedure relating to reporting of Bulk Dealtransactions through DUS System together with file structure is given as Annexure A.

3. Members may please note the following, while reporting the bulk deal transactions

(i) Single Trade: Immediately through DUS upon execution of the order where the traded quantity either buyor sell on account of any trade is more than 0.5% of the number of equity shares of the company listed onthe Stock Exchange.

(ii) Cumulative Trades for the Day: Within one hour from the closure of the trading hour, where the cumulativequantity traded under any single client code on that day for either purchase or sale is more than 0.5% of thenumber of equity shares of the company listed on the Stock Exchange. (The members can report the bulkdeals through DUS upto 5.00 p.m. on the day of execution of deal)

4. The Exchange would be disseminating the information relating to Bulk Deal transactions, as hitherto, based onthe reporting made by the member brokers through DUS to the Exchange.

5. In case of any clarification, the members may contact the following officials -

Official Name Purpose Extn. No. Department

Shri Shirish Bhosle Data Upload System 8718 Information Systems

Shri Kirit Mithiya Clarification on Bulk Deal Transactions 8599 Surveillance

Sanjiv J. KapurGen. Manager – Surveillance & CSD

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ANNEXURE A

OPERATIONAL INSTRUCTIONS FOR BULK DEALS REPORTIN

This DUS software is available to the members through DLOAD32. The member can use this software to report theBulk deals transaction done by him. Operational procedures are as mentioned below

The member will have to login to the DUS software thru this screen.

Drive : This is the drive where the DUS software has been installed on the PC. It can be C drive or D drive or E drive etc.

Broker Code : Same login as BDCUPLOAD login eg B9999 (where 9999 is the member number)Password : Password – Same as settlement download password.

After providing the broker code and password the username is validated. If valid user then the menu is displayed.

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As shown in the screen above the member has to select the Spot Deal Entry option from the Surveillance option underDepartment menu.

After selecting the Bulk Deal Data option the Bulk Deal entry screen is displayed.

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Add new Records.

When the bulk deal entry screen is always opened in an add more. The user can start entering the data directly. Oncompleting the entry click on <ADD> button to save the record.

<Record saved successfully> is the message that is displayed. The added record will be displayed in the display windowon the screen and the cursor is again positioned on the scrip code field.

Modify Existing Records

From the display window select the record which has to be modified. Modify the data and then click on the <Modify>button to save the record.

Deleting Existing Records

From the display window select the record which needs to be deleted. Click on the <Delete> button. The record willbe deleted.

Uploading the File to the Exchange

After the entry of the bulk deals is completed click on the <Upload> button. A file will be created and uploaded to theExchange. The file name will be Bkddmmyyyy.TXT

Please note that each time the member uploads a file, the records inserted will be appended to the previousrecords of the same day the file will contain all the records done for a particular day, unless physically deletedby the user. If the user reports one record at 10.00 am and another one record at 12:00 noon, then the file,which is uploaded at 12:00 noon, will be appended to the previous records of the day.

Loading a Bulk Deal File

If the total number of transactions are more, then the member can upload a pipe delimited text file thru the load facility.The member has to take care that the file format is exactly in the same format as specified.

MemberNO|ScripCode|Scrip Name|Client Code|Client Name|SalePurchase|Quantity|Rate|DealDate|

Data Item Description Remarks

Member No This field is only display field. The value in thisfield is picked up from the broker code whichis entered in the login screen

Scrip Code Scrip Code in which the member has made a deal

Scrip Name Will be automatically displayed depending uponthe selected scrip code

Transaction Type Whether it is a purchase transaction or sale transaction Click on the appropriate radio button

Client Code Client Code

Client Name Client Name will be accepted in No special characters this field

Quantity Quantity of the deal

Trade Price Trade price to be entered in decimal Eg.1000.00

Deal Date Date of the deal To be entered in dd/mm/yyyy format.

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Field Name Type Eg.

Member No Numeric 0999

Scrip Code Numeric 500410

Scrip Name Alphanumeric A.C.C.

Client Code Alphanumeric Length 12 characters

Client Name Alphanumeric Abc

Sale Purchase Flag Character 1 “P” for Purchase, “S” for Sale

Quantity Numeric 1000

Rate Numeric 9999.99

Deal Date Dd/mm/yyyy 12/04/2004

PLEASE NOTE THE FILE UPLOADED THROUGH THE LOAD OPTION SHOULD BE IN THE FORMAT SPECIFIEDABOVE. IF THE FILE IS NOT IN THE ABOVE FORMAT THEN THE RECORDS WILL BE REJECTED.

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Notice no : 20051108-28Notice date : Tuesday, November 08, 2005Subject : Modalities for Block DealSegment Name : General

Sub: Modalities for Block Deal.

Trading Members may refer to Exchange Notice No.20051014-6 dated October 14, 2005, and Exchange NoticeNo.20051028-4 dated October 28, 2005, informing them about the proposed change in BOLT TWS32 – version 37,which interalia includes facility of entering block deal orders in the system. The trading members of the Exchange arehereby informed that they shall be allowed to enter block deal orders with effect from November 14, 2005. This is inaccordance with SEBI circular No.MRD/DoP/SE/Cir-19/05 dated September 2, 2005 (copy enclosed as “Annexure I”).

In the new BOLT release the Exchange has provided a separate order type button “Block Deal” in the normal OrderEntry Window for entering of Block Deal orders. The screen print format of the new Order Entry Window is enclosedas “Annexure II”. The salient features of entering Block Deals orders in the BOLT System is given below:

• The facility to enter block deal orders in this mode is available for the first 35 minutes from the start of markethours i.e normally between 9:55 a.m. to 10:30 a.m.

• Any orders entered by the trading members having Order quantity of less than 5,00,000 shares or having ordervalue of less than Rs. 5 crore shall not be accepted by the system.

• Valid Price Range for entering Block Deals Orders in the BOLT System: Trading Members are hereby informedthat block deal orders in respective scrips which are within +/-1% from the ruling market price (i.e. last tradedprice) or the previous closing price (if there is no trade executed in the scrip before entering of the block dealorders) subject to the applicable circuit filter limits will only be accepted as valid orders in the system.

• The block deal orders in a scrip will be matched against the counter order with same quantity and price on a timepriority basis.

• Trading Members may further note that the block deal orders entered by them shall be valid for 90 seconds and ifthey remain unexecuted till then the orders shall automatically be deleted by the system.

• Trading Members should note that the rates of block deal transactions executed in a scrip shall not be consideredfor computation of opening price, closing price of the scrip, and for calculation of INDEX values.

• All the block deal orders, which had resulted into trades, are to be settled on a Trade to Trade basis (e.g. as settledin “T” Group) and any shortage shall result directly into close out of transaction as per the applicable formula.

• STT shall be charged on these block deal transactions on similar lines as is being charged for scrips which aresettled on a Trade to Trade basis (eg.. “T” Group).

• 6A/7A facility is also available for settlement of block deal transactions.

• Margins as applicable at client level in the normal trading window would be applicable for block deals.

• The facility of early pay-in of securities is provided.

• The trading members who have executed the block deal transactions are required to enter the trading details suchas the name of the scrip, name of the client, bought/sold, quantity of shares, trade price etc, in the DUS softwareand the same shall be disseminated by the Exchange on its website after the end of the market hours. A separatenotice detailing the modalities for uploading the said details by the trading members is being issued in this regard.

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In case of any clarification the Trading members are requested to contact the undermentioned officials:

A) For Technical Queries:

• Mr. Sushil Limbulkar (Extn:8190)

• Mr. Yogesh More (Extn:8456)

B) For Settlement Queries:

• Ms. Sheela Anjaria (Extn: 8149)

• Ms. Netra Sahani (Extn: 8304)

Devika Shah Sanjiv KapurGeneral Manager General Manager(Clearing & Settlement) (Department of Surveillance and Supervision)

Tuesday, November 8, 2005.

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Annexure I

General ManagerMarket Regulation Department – PolicyEmail:-sundaresanvs@sebi.gov.in

MRD/DoP/SE/Cir- 19 /05 September 2, 2005

The Executive Directors/Managing Directors/Administrators of all Stock Exchanges

Dear Sir / Madam,

Sub : Guidelines for execution of block deals on the stock exchanges

1. SEBI had issued a circular (reference no. SEBI/MRD/SE/Cir-7/2004) on January 14, 2004 on disclosures of detailsof “bulk” deals with a view to impart greater transparency to the market on such transactions executed on thestock exchanges. In terms of paragraph 1.1 of that circular, a “bulk” deal constituted of “all transactions in ascrip (on an exchange) where total quantity of shares bought/sold is more than 0.5% of the number of equityshares of the company listed on the exchange”. Thus the quantitative limit of 0.5% could be reached through oneor more transactions executed during the day in the normal market segment.

2. There is however a felt need of the market to execute large trades through a single transaction easily withoutputting either the buyer or the seller in a disadvantageous position. In order to facilitate execution of such largetrades, the stock exchanges are being permitted to provide a separate trading window. A trade, with a minimumquantity of 5,00,000 shares or minimum value of Rs.5 crore executed through a single transaction on this separatewindow of the stock exchange will constitute a “block deal” as distinguished from “bulk” deal defined earlier.

3. A “block” deal will be subject to the following conditions :

a. The said trading window may be kept open for a limited period of 35 minutes from the beginning of tradinghours i.e. the trading window shall remain open from 9.55 am to 10.30 am.

b. The orders may be placed in this window at a price not exceeding +1% from the ruling market price/previousday closing price, as applicable.

c. An order may be placed for a minimum quantity of 5,00,000 shares or minimum value of Rs.5 crore.

d. Every trade executed in this window must result in delivery and shall not be squared off or reversed.

e. The stock exchanges shall disseminate the information on block deals such as the name of the scrip, name ofthe client, quantity of shares bought/sold, traded price, etc to the general public on the same day, after themarket hours.

f. There is no change in regard to the disclosure of trade details of “bulk deals” as specified in the earlier SEBIcircular reference no. SEBI/MRD/SE/Cir -7/2004 dated January 14, 2004, and such disclosures shall be continuedto be made by the stock exchanges to the general public on the same day after the market hours.

4. The stock exchanges shall ensure that all appropriate trading and settlement practices as well as surveillance andrisk containment measures, etc., as presently applicable to the normal trading segment are made applicable andimplemented in respect of the proposed special window also.

5. The stock exchanges are advised to

a. make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of theabove decision immediately.

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b. bring the provisions of this circular to the notice of the member brokers/clearing members of the Exchangeand also to disseminate the same on the website.

c. communicate to SEBI, the status of the implementation of the provisions of this circular in the MonthlyDevelopment Report for the month of September 2005.

6. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and ExchangeBoard of India Act, 1992, to protect the interests of investors in securities and to promote the development of, andto regulate the securities market.

Yours faithfully,

V S SUNDARESAN

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Notice no : 20051108-29Notice date : Tuesday, November 08, 2005Subject : Disclosure of trade details of Block DealsSegment Name : Equity

This is with reference to notice no. 20051108-28 dated November 08, 2005 issued by the Exchange regardingintroduction of Block Deal. As mandated under SEBI circular MRD/DoP/SE/Cir-1905 dated September 02,2005, theExchange is providing facility for execution of BLOCK DEALS, w.e.f., November 14,2005. SEBI has mandated thatthe information on BLOCK DEALS shall be disseminated by the exchanges on the same day after the market hours.The modalities relating to disclosure of BLOCK DEALS are as follows:

I. DISCLOSURES TO BE MADE:

Trade details of BLOCK DEAL such as Deal date, Scrip code, Scrip Name, Quantity, Buy or Sell, Rate, Client codeand Client name are to be reported by the member to the Exchange through the Data Upload System (DUS). Itmay be noted that members are required to upload information of each trade executed in block deal separately.

The detailed procedure of uploading the information in the DUS along with file structure is attached as Annexure– I.

II. TIME OF DISCLOSURE/ UPLOAD OF INFORMATION BY THE MEMBER:

The details of BLOCK DEAL executed by the member are to be uploaded by the trading member on the same dayof execution of trade through the DUS. The DUS software will be available for upload of information till 5 p.m

III. DISSEMINATION OF BLOCK DEAL INFORMATION:

The BLOCK DEAL information uploaded by all the members will be disseminated by the Exchange to the market,on the same day, after the end of trading hours. The information will be available on the website at ‘Equity Marketsummary BLOCK DEALS’ for the latest trading day. The BLOCK DEAL Data for historical period will be availableon the website in ARCHIVES BLOCK /BULK DEALS. The information will be available in the following format.

# Client Name will be the name of the Client whose code is entered at the time of execution of the deal

It may be noted that there is no change in regard to the disclosure of trade details on bulk deals as specified in theExchange notice no. dated 20040216-10 dated February 16,2004.

Deal Date Scrip code Scrip Name Client Name (#) Buy or Sell Trade Quantity Trade Price

Purpose Official Name Extn. DepartmentNo.

Functional Queries- Clarification on Block Mr. Kirit Mithiya 8599 Department of Surveillance andDeal Transactions Mr. Jayesh Ashtekar 8354 Supervision

Technical Queries - Data Upload System Shri Hrishikesh Sukhtankar 8718 Information Systems

(Sanjiv Kapur)

General Manager - Department of Surveillance and Supervision

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ANNEXURE - I

OPERATIONAL INSTRUCTIONS FOR BLOCK DEALS REPORTING

The member can use DUS software to report the Block deals transaction done by him. The Operational procedure isexplained below.

After logging in, the “Block Deal Data” sub-menu can be invoked by clicking on the “Surveillance” menu as shown inthe figure below.

After selecting the Block Deal Data option the Block Deal entry screen is displayed.

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Data Item Description Remarks

Member No This field is only display field. The value in thisfield is picked up from the broker code which isentered in the login screen

Scrip Code Scrip Code in which the member has made a deal

Scrip Name Will be automatically displayed depending uponthe selected scrip code

Transaction Type Whether it is a buy transaction or sell transaction Click on the appropriate radio button

Client Code Client Code

Client Name Client Name in this field No special characters will beaccepted

Quantity Quantity of the deal Eg. 9999

Trade Price Trade price to be entered in decimal Eg.1000.00

Deal Date Date of the deal To be entered in dd/mm/ yyyy format.

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Note : While adding/updating the Block Deal Record, quantity cannot be less than 5,00,000 OR Trade Value (Qty *Price) should not be less than 5,00,00,000 (Rs.).

Add new Records

When the block deal entry screen is always opened in an add more. The user can start entering the data directly. Oncompleting the entry click on <ADD> button to save the record.<Record saved successfully> is the message that isdisplayed. The added record will be displayed in the display window on the screen and the cursor is again positionedon the scrip code field.

Modify Existing Records

From the display window select the record which has to be modified. Modify the data and then click on the <Modify>button to save the record.

Deleting Existing Records

From the display window select the record which needs to be deleted . Click on the <Delete> button. The record(s)will be deleted.

Uploading the File to the Exchange

After the entry of the block deals is completed click on the <Upload> button. A file will be created and uploaded to theExchange. The file name will be BLOCK<dd><mm><yy>.<memberid>

Please note only one file is allowed for upload per day. If the member uploads more than one file on a particular day,the last file uploaded will be considered for dissemination of information. The member may please ensure all the recordsfor the day are included in the file uploaded.

Loading a Block Deal FileIf the total number of transactions are more , then the member can upload a pipe delimited text file through the loadfacility. The member

Field Name Type Eg.

Member No Numeric (Max 4 Digits) 0999

Scrip Code Numeric (6 Digits) 500410

Client Code Alphanumeric Length 12 characters

Client Name Alphanumeric (Max 60) E.g. Abc123

Sale Purchase Flag Character 1 “P” for Purchase,“S” for Sale

Quantity Numeric 600000

Rate Numeric 9999.99

Deal Date dd/mm/yyyy 12/04/2004

Note: Quantity cannot be less than 5,00,000 OR the trade Value (Qty * Rate) can not be less than 5,00,00,000.

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Notice no : 20040402-31Notice date : Friday, April 02, 2004Subject : Margin TradingSegment Name : Equity

April 2, 2004

Sub : Margin Trading

Attention of the members is invited to Exchange Notice No. 20040325-19 dated March 25, 2004 wherein SEBI guidelineson Margin Trading and Securities Lending and Borrowing as per SEBI’s circular No. SEBI/MRD/SE/SU/Cir-15/04 datedMarch 19, 2004 were advised. SEBI has subsequently issued a circular No. SEBI/MRD/SE/SU/Cir-16/04 dated March31, 2004 clarifying certain aspects in the matter. A copy of the said circular is enclosed as Annexure- A.

2. The members are advised that the Exchange has decided to permit the members of the Exchange to providefacility of Margin Trading to their clients within the aforesaid SEBI guidelines with immediate effect.

3. The modalities with respect to the Margin Trading facility by the members of the Exchange to their clients aregiven as under:

• Permission from the Exchange :

Corporate members with a Net-worth of Rs. 3.00 crores are eligible to provide the facility of Margin Trading to theirclients. Such eligible members are required to make a request to the Membership Dept. on the 1st Floor of theExchange seeking Exchange’s permission in this regard. The request could be faxed on 022 – 2272 3185 withoriginal request delivered to the Dept. within 2 days from the date of faxed message. The members are requiredto submit Net-worth certificate from their auditor in the prescribed format alongwith their application. Draft formatsof the request letter along-with the format for Net-worth certificate are enclosed as Annexure- B. The memberscan submit certificate confirming Net-worth as on September 30, 2003 or as on March 31, 2004, while making therequest. However, in case the members who have given Net-worth Certificate as on September 30, 2003, theywould be required to submit Net-worth Certificate as on March 31, 2004 latest by April 30, 2004. The MembershipDept. will grant permission to the members for providing Margin Trading to their clients.

• Eligible Securities :

The securities forming part of Group I securities for computation of VaR Margins would be eligible for margintrading facility. Currently, 367 scrips are included in Group 1. A list of these securities where the Margin Trading ispermitted during April 2004 is enclosed as

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Annexure- C. A list of eligible securities would be periodically announced by the Exchange at the end of the month,which would be effective from the first date of the ensuing month.

• Reporting of Margin Trades :

The members are required to report Margin Trades latest by 12:00 noon on the following day. The members mayplease note the following:

• The members are required to report only the Margin Trades position where the transactions have been executedon the Exchange.

• The members would be required to report cumulative outstanding position of Margin Trading. The formats ofreports specified by SEBI are enclosed as Annexure- D for information of the members.

• The Exchange has provided a system of reporting of these trades through Data Upload System (DUS). Thedetails regarding mechanism of reporting Margin Trade in DUS system as well as file structures are given asAnnexure- E.

• The members are required to report the Margin Trade position in the DUS system on the next trading day onlybetween 9:00 a.m. and 12:00 noon.

• The members are required to place suitable internal systems to ensure that they are complying with the variousSEBI stipulations relating to Maximum borrowing, total and single client exposure etc. as per the aforesaid SEBIcircular and various other circular issued in this regard by SEBI from time to time.

• Utmost care should be taken to ensure accuracy of Margin Trade data in DUS system. The members may beliable for strict disciplinary action in case of wrong/ false Margin Trade data reporting.

• Disclosure of Margin Trade position by the Exchange :

Based on the reporting done by the brokers to the Exchange, the Exchange would disclose the Margin Tradeposition across the market (for all its members) at the end of the day.

• Half- yearly Certificates :

The members providing facility of Margin Trading to their clients would be required to submit the following certificates:

• Net-worth Certificate : The Net- worth certificate should be submitted in the format enclosed as Annexure–B tothe Membership Dept of the Exchange. The members are required to submit Net-worth certificate in the prescribedformat confirming Net-worth as on30th September and 31st March latest by 31st October and 30th April.

• Margin Trading Compliance Certificate : The books of accounts, maintained by the members, with respect tomargin trading facility offered by them would be audited. The member would be required to submit an auditor’scertificate certifying the extent of compliance with the conditions of Margin Trading facility. The members arerequired to submit such certificate for the half- year ending 31st March and 30th September latest by 31st Octoberand 30th April to Inspection Department.

• Arbitration : It may be noted that the arbitration mechanism of the exchange would not be available for settlementof disputes, if any, between the client and members, arising out of the margin trading facility. However, anydisputes relating to transactions done on the exchange, whether normal or through margin trading facility, shall becovered under the arbitration mechanism of the exchange.

• IPF/ TGF: The amounts lying in these funds would not be available for settling any loss suffered in connection withthe margin trading facility. However, the aforesaid funds will continue to be available for all transactions done on

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the exchange, whether normal or through margin trading facility.

• Inspection by the Exchange : It may please be noted that the Exchange may inspect the books of the membersto ensure compliance of the various SEBI guidelines for the Margin Trading. Also, the Exchange may advise amember to discontinue facility of Margin Trading to their clients in the overall interest of the market.

4. The detailed mechanism regarding Securities lending and Borrowing would be advised to the members in duecourse.

5. In case of any queries or clarifications the members may approach their Account Managers or the Helpdesk overExtension 5000 or Shri Shirish Bhosle in ISD on DUS system over Extension.No. 8718

Kevin Desouza Sanjiv KapurCGM - Membership & Inspection. GM – Clearing & Settlement

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Annexure- A

Deputy General ManagerMarket Regulation DepartmentEmail:-sundaresanvs@sebi.gov.inSEBI/MRD/SE/SU/Cir-16/04March 31, 2004

The Managing Directors/ Executive Directors/Administrators of all the Stock Exchanges

Dear Sir,

SUB :- MARGIN TRADING AND SECURITIES LENDING AND BORROWING - CLARIFICATION

1. Please refer to the SEBI Circular SEBI/MRD/SE/SU/Cir-15/04 dated March 19, 2004 on the captioned subject.

2. Since the notified date for obtaining the new Unique Identification Number (UIN) by the intermediaries registeredwith SEBI has been postponed to June 30, 2004 and some intermediaries have informed SEBI that as at present,they are not in a position to obtain UIN for all their clients availing of margin trading facility in a short period of timeon account of logistic difficulties, it has been decided to allow a further period of 3 months, i.e. up to June 30, 2004,to the clients who want to avail margin trading facility to obtain an UIN. Till such time the clients obtain the UIN, thebroker shall obtain suitable undertaking from the clients and do due diligence to ensure that the client is notavailing the margin trading facility from more than one broker at any point of time.

3. The exchanges have submitted that they are in the process of getting their clearing corporation/house registeredas an intermediary under the SEBI securities lending and borrowing scheme (SLS), for handling settlementshortages. Therefore, pending registration under SLS, the stock exchanges are advised to continue with theexisting system for handling settlement shortages. The exact date of implementation of the close-out procedureas per the circular No.15/2004 dated 19th March, 2004 would be decided by NSE in consultation with BSE.

4. The provisions stated under the head “Section XI. Arbitration” of the Model Margin Trading Agreement enclosedas annexure 1 to the aforesaid circular, stands deleted, on account of the provisions of clause 1.10 of the circular.

5. In addition to the above, clauses 1.5.4 and 1.5.5 of the said circular may be read as follows:

1.5.4 The “maximum allowable exposure” of the broker towards the margin trading facility shall be within the self imposedprudential limits and shall not, in any case, exceed the borrowed funds and 50% of his “net worth”. The term“exposure” will mean the aggregate outstanding margin trading amount in the books of the broker for all hisclients.

1.5.5 While providing the margin trading facility, the broker shall be prudent and also ensure that there is no concentrationon any single client. In any case, the exposure to any single client at any point of time shall not exceed 10% of thebroker’s lendable resource (i.e. borrowed funds for the purpose of margin trading + 50% of net-worth) “

6. The other contents of the circular would remain unchanged.

Yours faithfully,

V S SUNDARESAN

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Annexure - B

(On letterhead of Members of the Exchange)

Date :

To,Membership Department,1st Floor, Rotunda Bldg.Dalal Street,Mumbai.

Sub : Application for Margin Trading and Securities Lending and Borrowing

Dear Sir,

We are desirous of providing margin-trading facilities to our clients in the Cash Segment.

In this connection, we undertake to comply with the conditions mentioned in the SEBI Circular SEBI/MRD/SE/SU/Cir-15/04 dated March 19, 2004.

We also undertake to report to the Exchange on a daily basis, the amount financed by us under the Margin TradingFacility.

A copy of Networth Certificate as on September 30, 2003*/ March 31, 2004* duly certified by the Chartered Accountantis enclosed as Annexure – 1. Networth Certificate as on March 31, 2004 would be submitted to the Exchange on orbefore April 30, 2004*

You are requested to kindly permit us to provide margin trading facility to our clients.

Thanking You,

Yours faithfully,

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Director / Authorised Signatory.Encl : as above* Strike out if not applicable.

Computation of Networth for the Members of the Exchange applying for Margin Trading (Minimum Requirement:Rs. 3 Crore)

Name of the Member

Clearing No.

Statement of Networth as on ————

Particulars Rs. Rs. Rs. Annexure

1 Paid-up Capital ( excluding preference share capital) x

2 Free Reserves x

3 SUB-TOTAL “A”(Items 1+2) X

Less :

4 Fixed assets x

5 Pledged Securities x

6 Member’s card x

7 Non-allowable securities (unlisted securities) x

8 Bad deliveries x

9 Doubtful debts and advances* x

10 Prepaid expenses x

11 Intangible assets x

12 30% of marketable securities x

13 TOTAL “B” [Items 4 to 12] X

14 NETWORTH [“A” (-) “B”] X

Explanation :

CAPITAL (EXCLUDING PREFERENCE SHARE CAPITAL) + FREE RESERVES

Less : non-allowable assets

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Annexure- D

Format of the Daily Reporting by the members to the Exchange on the amount financed by them under the MarginTrading Facility specified by SEBI:

Name of the member Clearing No.

Name of Client MAPIN No. Name of the scrip/s Qty financed (No. of Shares) Amount (Rs. in lakhs)

Sl.No. Particulars (Rs. in lakhs)

01 Total outstanding on the beginning of the day

02 Add : Fresh exposure taken during the day

03 Less: exposure liquidated during the day

04 Net outstanding at the end of the day

SOURCES OF FUNDS (Refer to item No. 4 above)

01 Out of net worth

02 Out of borrowed funds

03 If borrowed, name of lenders and amount borrowed to be specified separately

Note : Disclosure is required to be made on or before 12 noon on the following day.

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Annexure- EDUS USER MANUAL

MARGIN TRADING POSITION MONITORING WINDOW

Figure 1 : Margin Trading Position Monitoring Window

Figure 2 : Margin Trading Position Monitoring Window

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How to use MARGIN TRADING POSITION MONITORING WINDOW :• Select Margin Trade pop up option from the Surveillance submenu of the Departments Main menu. This will

open Margin Trading Position Monitoring Window for you. Or using keyboard press [Alt] +D +V +M.

• How to Add a record :

Select a Scrip Code. The corresponding Scrip Name for the selected scrip code can be seen in the ScripName box. Enter Client Code, Client Name, MAPIN No., Quantity and Amount (in Lakhs). Click on the“Add” button or from the keyboard press [Alt] + A. A message box is displayed with the message: “Recordadded successfully”.

The record is added in the display box of the window as shown in the figures below :

Figure 3: Record added is displayed in the window.

The entire data displayed in the window can be seen by using the scroll bar of the Margin Trading Position MonitoringWindow as shown in the figure below:

Figure 4 : Use the scroll bar of see the entire data displayed in the window.

• How to modify a record :Select the record using mouse or keyboard.

All the fields of selected record can be seen in the edit boxes of the window.Change record as required and click “modify” button or press [Alt] +M.

The modified record is displayed in the window in place of the record selected.

• How to delete a record :Select the record using mouse or keyboard.All the fields of selected record can be seen in the edit boxes of the window.

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Press “Delete” button or press [Alt] +D. A confirmation message is displayed to the user, “Are you sure youwant to delete the record[s]?If you click yes the record is deleted from the window.

• How to Load a record :

Click on the “Load” button of press [Alt] +L. The LOAD FILE box is opened. Select a file name to open the file. Theinput file naming convention is *.mrg.

All the proper records in the file are displayed in the window and the user gets message that the records are loadedgiving the number of records loaded from the file.

User has to prepare a pipe delimited text file , *.mrg file. The file format is given below: Please note that the amountfinanced should be entered in lakhs.

MEMBERNO|CLIENTCODE|CLIENTNAME|MAPIN NO|SCRIPCODE|

Quantity Financed|Amount Financed|

E.g.997|code|nameclient|MAPIN12|500112|150|600|

• How to Upload the records:

If you want to upload the records displayed in the window click the Upload button or from the keyboard press Alt

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+U. You get the message in the message box giving the Total Amount Financed.

If you click ‘Ok’, the records in the window are uploaded and a message is displayed “Margin file uploadedsuccessfully”. If you click ‘Cancel’, the records won’t be uploaded.

How to Upload Other Files :

You also have an option of uploading other files, namely, “Scripwise Outstanding/Exposure” file and “Sources of Funds”file. For uploading, you have to select the radio button for the type of file you want to upload. After that, click “UploadOther Files” button. It will invoke a “Load File Dialog” box. The default filter will be either MGA* or MGB* depending onthe radio button selected. If “Scripwise Outstanding/Exposure” radio button is selected, the default filter will be MGA*and if “Sources of Funds” radio button is selected, the default filter will be MGB*. Once you select a file, the file willbe uploaded. The uploaded file name will be either MGA<dd><mm><yyyy>.xxxx or MGB<dd><mm><yyyy>.xxxx, where–

<dd>, <mm>, <yyyy> à current day, month and year.

xxxx à Member Number.

The MGA* file should be a pipe delimited text file in the following format.

Date|MemberCode|ScripCode|Total BOD Outstanding|Fresh Exposure|Exposure Liquidated|Net Outstanding at EOD

In all there are 7 fields in the MGA* file.

The MGB file should also be a pipe delimited text file in the following format

DATE|MEMBERCODE|OWN OR LENDER NAME|AMOUNT BORROWED

In all there are 4 fields in the MGB file. If the members is using his own funds then he has to mention OWN in the 3 field.Or else the lenders name.

Please note that the file formats which are mentioned are adhered to or else the data will be rejected.

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Notice no : 20041029-13Notice date : Friday, October 29, 2004Subject : Information regarding Client funding by the MembersSegment Name : Equity

The members of the Exchange are hereby informed that the Securities and Exchange Board of India vide its letterdated July 16, 2004 addressed to the Exchange, has directed the members to disclose on the Exchange’s website ona monthly basis, the following details:

Quote :

Extent of client funding by the broker and the number of clients for whom such funding has been made (for the cashsegment only). The client funding for such purposes shall include the margin and settlement obligations of a clientfunded by the member/broker.

Unquote

Members are requested to use the DUS software for entering all the requisite data. This software will be availablew.e.f. November 1, 2004, for reporting data related to the month of October 2004. Members should note that they canenter the data till November 8, 2004 only.

OPERATIONAL INSTRUCTIONS :

After logging on to the DUS software, the member has to select the Client funding option from the Inspection optionunder the Department Menu.

Data Item Description

Total Amount Funded The member has to enter the total amount funded by him to his variousclients for the reporting month.

Total Settlement Amount The member has to enter the total settlement obligation of all the clientswho have been funded by him for thereporting month.

Total Margin Obligation The member has to enter the total margin obligation of all the clients whohave been funded by him for the reporting month.

No. Of Clients The number of clients who have been funded during the reporting month.

In case of any queries/ clarification, members may contact the under mentioned officials:

NAME INTERCOM NO.

Ms. Srividhya Subramanian 8404

Mr. Shirish Bhosle (For system related queries only) 8718

Devika Shah Mayank MehtaGeneral Manager Asst. General ManagerMembership & Inspection Inspection

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Notice no : 20050824-16Notice date : Wednesday, August 24, 2005Subject : Information regarding Client funding by the Members for July 2005Segment Name : General

Members of the Exchange are requested to refer Exchange Notice no. 20041029 – 13 dated October 29, 2004 on theabove-mentioned subject. In continuation of the above notice, Members are hereby informed that SEBI vide letter datedJune 29, 2005 advised Members that the disclosure of their net exposure towards their clients on a particular dayshould be maximum/peak exposure of funding by the Members for their clients. The disclosure shall include the temporaryfunding of the Member for their clients towards margin (retail clients), settlement obligations (both institutional and retailclients) and margin trading as also the total. (i.e the maximum/peak exposure of funding by the member broker for theirclients).

Members of the Exchange are requested to report the data in the modified version of the DUS software (Ver.11.20)available w.e.f August 24, 2005 for entering all the requisite data for the month of July 2005 ONLY in the manner asexplained herein below under operational instructions. Members should note that they could enter the data till August 30,2005 upto 6 p.m.

Operational Instructions :

After logging on to the DUS software, the member has to select the Client funding option from the Inspection optionunder the Department Menu.

Data Item Description

Amount Funded as Margin Obligation on behalf of The amount funded means and includes member’s own moneyClients ( A ) put towards client’s margin obligations. The amount entered

should correspond to the day when the total funding undercolumn (E) is at its peak/maximum and the amount entered inthis column together with the amount entered in(B), (C) and(D) should add upto the maximum/ peak(total funding) enteredunder column (E).

Amount Funded as Settlement Obligations for The member has to enter the amount funded towardsInstitutional Clients ( B ) settlement obligations of the Institutional Clients who have

been funded by him for the reporting month. If this column isnot applicable then the member has to enter “0”. The amountentered should correspond to the day when the total fundingunder column (E) is at its peak/maximum and the amountentered in this column together with theamount entered in(A), (C) and (D) should add upto the maximum/ peak (totalfunding) entered under column (E).

Amount Funded as Settlement Obligations for The member has to enter the amount funded towardsNon-Institutional Clients( C ) settlement obligations of the Non-institutional clients who Non-

Institutional Clients( C ) have been funded by him for thereporting month. If this column is not applicable then themember has to enter “0”. The amount entered shouldcorrespond to the day when the total funding under column(E) is at its peak/maximum and the amount entered in thisNon-Institutional Clients( C )column together with the amountentered in (A), (B) and (D) should add upto the maximum/peak(total funding) entered under column (E).

Amount Funded under Margin Trading facility ( D ) Amount funded by the member to clients under the option ofMargin Trading. If this column is not applicable then themember has to enter “0”. The amount entered shouldcorrespond to the day when the total funding under column(E) is at its peak/maximum and the amount entered in this

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The Members who have even a single instance of funding extended to their clients as above should compulsorily uploadthe information. Members who have no instances of funding extended to their clients need not upload any informationin this regard. In case of any queries/ clarification, members may contact the under mentioned officials:

NAME INTERCOM NO.

Ms. Shaila Valsan 8316

Mr. Sanjay Pai 8356

Mr. Hrishikesh Sukhtantkar (For system related queries only) 8718

P.K.Ramesh Kritika DagaDy. General Manager Asst. General ManagerDOSS DOSS

column together with the amount entered in (A), (B) and (C)should add upto the maximum/peak(total funding) enteredunder column (E).

Total Amount Funded Maximum/peak of sum It will be the Maximum/peak[sum total of Amount funded as( A + B + C + D)on a particular day Margin total of Obligation on behalf of Clients + Amount funded

as Settlement Obligations for Institutional Clients + AmountFunded as Settlement Obligations for Non-Institutional Clientson a particular day + Amount Funded under Margin Tradingfacility] for a particular day of the month.

Total No. of Unique Clients This column will include the total number of clients who havebeen funded under Margin obligation, Settlement obligationfor institutional clients, Settlement obligation for non-institutional clients and under Margin trading facility. If anyparticular client has been funded under more than onecategory, then the client will counted only once so as to avoidduplication.

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Notice no : 20051216-8Notice date : Friday, December 16, 2005Subject : Information regarding client funding by the Trading

Members.Segment Name : General

Information regarding client funding by the Trading Members.

Attention of the Trading Members of the Exchange is drawn to Exchange Notice No.-20041029-19 dated October 29,2004 and Exchange Notice No. 20050824-16 dated August 24, 2005 regarding the captioned subject. The disclosureof client funding data by the Trading Members is disseminated through the Exchange website, by the 10th working dayof every month.

In order to mitigate the procedural difficulties involved in reporting the funding done by brokers with respect totransactions of small quantities executed on behalf of large no. of clients, the Securities & Exchange Board of Indiavide letter no. MRD/Policy/AT/55628/2005 dated December 13, 2005 has clarified that “Member brokers may be advisedto exclude the funding done by them with respect to contracts of value Rs.1 lakh or below, executed by them on behalfof their clients for the purpose of the aforesaid requirements w.e.f December 2005.”

The Trading Member are requested to take note of the above clarifications of SEBI and may therefore exclude thefunding done by them with respect of Contracts of value upto Rs. 1 lakh on a particular day while disclosing the clientfunding data.

Trading Members may also note that all other provisions/reporting requirements as specified in the above referrednotices would remain unchanged.

P.K.Ramesh Pankaj GuptaDy. General Manager Asst. General ManagerSurveillance & Supervision Surveillance & Supervision

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Notice no : 20060221-10Notice date : Tuesday, February 21, 2006Subject : Penalty Norms for not uploading the client funding details.Segment Name : Equity

As per the requirement of SEBI Trading Members are required to disclose their peak client funding during the month,on a monthly basis after excluding the contract notes of upto Rs. 1 lakh. This disclosure includes the temporary fundingof the Trading Member for their clients towards settlement obligations, Margins and Margin trading.

In order to ensure that all active members are reporting the client funding details on a monthly basis the Exchange,has decided to impose penalty on Trading Members who are not uploading the client funding Details within in theprescribed time.

The penalty structure for not reporting client funding details is as under :-

Sr. No. Particulars Fines/Penalties

1. Not reporting the client funding data by due date. Rs. 1000/-

2. Consecutive defaults in reporting the data of client funding Rs. 1,500/-data for subsequent months.

All the Trading members would now be required to compulsorily upload the client funding data in the DUS softwareeven if funding during the month is zero. Failure to upload the data within the prescribed time limit by the memberswould attract penalty as per the norms.

Those members who do not have a system in place to calculate and upload the client funding details are advised tohave a system in place to compute and upload the client funding details. The penalty for not reporting the client fundingdetails would be applicable for reporting the client funding from the month of April 2006 for which members wouldupload the details in the month of May 2006.

The Trading members are advised to take note of the above.

In case the Trading Members require any clarification, they may please contact any of the following: -

NAME INTERCOM NO.

Ms Shaila Valsan 8316

Ms Amita Tarwale 8262

Mr. Yogesh Betsur 8297

Sanjiv Kapur Pankaj GuptaGeneral Manager Asst. General ManagerSurveillance & Supervision Surveillance & Supervision

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Notice no : 20040927-13Notice date : Monday, September 27, 2004Subject : Securities Transaction Tax (STT) - Equity SegmentSegment Name : Equity

To: All Members of the Exchange

SUBJECT : SECURITIES TRANSACTION TAX- EQUITY SEGMENT

This has reference to the Securities Transaction Tax (STT) introduced in Chapter VII of the Finance (No. 2) Act 2004 andSEBI circular No MRD/DoP/SE/Cir-32/04 dated September 23, 2004 in this regard (copy enclosed refer Annexure III).

As per the Finance (No. 2) Act 2004, STT on the transactions executed on the Exchange will be as under :

Sr No. Taxable Securities Transactions Rate Payable by

(1) (2) (3) (4)

1. Purchase of an equity share in a company or a unit of 0.075 percent Purchaseran equity oriented fund, where –

(a) the transaction of such purchase is entered into in arecognised stock exchange; and

(b) the contract for the purchase of such share or unit issettled by the actual delivery or transfer of such share or unit.

2. Sale of an equity share in a company or a unit of an 0.075 percent Sellerequity oriented funds, where —

(a) the transaction of such sale is entered into in a recognisedstock exchange; and(b) the contract for the sale of such shareor unit is settled by the actual delivery or transfer of suchshare or unit.

3. Sale of an equity share in a company or a unit of an equity 0.015 percent Selleroriented fund, where (a) the transaction of such sale is enteredinto in a recognised stock exchange; and (b) the contract for thesale of such share or unit is settled otherwise than by the actualdelivery or transfer of such share of unit.

Members may note that the Exchange will adopt the following procedures for calculation, levy and collection of STT:

a) Normal market netted transactions

1 STT is applicable for all transactions.

2 STT shall be determined at the end of each trading day.

3 All the transactions shall be identified based on the trading client code placed by the members at the timeof order entry on the trading system of the Exchange and as may be modified by the member using theclient code modification facility provided by the Exchange within the prescribed time.

4. Members may note that under the draft STT Rules 2004, the value of taxable securities transaction shall bedetermined with respect to the trade executed under a particular trading client code. Therefore the exchangeshall only reckon the client code entered by the member while placing the order or as may be modifiedwithin the prescribed time. It is therefore imperative that members exercise extreme caution and diligencewhile entering the client code at the time of entering an order.

5. For each trading client code, all the buy and sell transactions for a trading day shall be aggregated for eachsecurity.

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6. The difference between the buy quantity and the sell quantity shall denote the quantity that shall be requiredto be settled by actual delivery.

7. The buy or sell quantity that has been offset shall denote the quantity that shall be settled other than byactual delivery.

8. The transactions that are settled by actual delivery or other than by actual delivery shall be valued at thevolume weighted average price calculated for that client.

9. Volume weighted average price is calculated as follows: For each trading client code and a security it is thetotal traded value divided by the total traded quantity, where trade value is trade price multiplied by tradequantity. This price shall be rounded off to the nearest paisa.

10. In respect of transactions that are required to be settled by actual delivery, the value of the actual deliverytransactions shall be determined as, the quantity that is required to be settled by actual delivery multipliedby the volume weighted average price. On this value, the STT rate as prescribed shall be applied to determinethe STT liability.

11. In respect of transactions that are to be settled other than by actual delivery, the value of the transactionsthat are settled other than by actual delivery shall be determined as the quantity that is to be settled otherthan by actual delivery multiplied by the volume weighted average price. On this value, the STT rate asprescribed shall be applied to determine the STT liability.

12. A sum total of all such STT calculated for different securities transacted by a client shall be the total STTliability for the client for that trading day.

13. STT payable by the member shall be the sum total of STT payable by all his clients.

b) Trade for trade transactions

1 STT is applicable for all transactions.

2 STT shall be determined at the end of each trading day.

3 All the transactions shall be identified based on the trading client code placed by the members at the timeof order entry on the trading system of the Exchange and as may be modified by the member using theclient code modification facility provided by the Exchange within the prescribed time.

4. Members may note that under the draft STT Rules 2004, the value of taxable securities transaction shall bedetermined with respect to the trade executed under a particular trading client code. Therefore the exchangeshall only reckon the trading client code entered by the member while placing the order or as may bemodified within the prescribed time. It is therefore imperative that members exercise extreme caution anddiligence while entering the trading client code at the time of entering an order. Members are also advisedto carry out client code modification, if any within the prescribed time. The exchange shall not entertain anyrequest for modification thereafter.

5. Each trade shall be considered to be settled by actual delivery.

6. Each trade shall be valued at the actual trade price and the trade value shall be the trade price multiplied bythe trade quantity.

7. STT rate as prescribed shall be applied on the trade value to determine the STT liability for each transaction.

8. A sum total of all such STT calculated for different securities transacted by a client shall be the total STTliability for the client for that trading day.

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9. STT payable by the member shall be the sum total of STT payable by all his clients.

c) Auction transactions

1. STT is applicable for all transactions.

2. STT shall be determined at the end of each trading day.

3. Sale transactions in the auction session shall be identified based on the trading client code placed by themembers at the time of order entry on the trading system of the Exchange and as may be modified by themember using the client code modification facility provided by the Exchange within the prescribed time.

4. Members may note that under the draft STT Rules 2004, the value of taxable securities transaction shall bedetermined with respect to the trade executed under a particular trading client code. Therefore the exchangeshall only reckon the trading client code entered by the member while placing the order or as may bemodified within the prescribed time. It is therefore imperative that members exercise extreme caution anddiligence while entering the trading client code at the time of entering an order. Members are also advisedto carry out client code modification, if any within the prescribed time. The exchange shall not entertain anyrequest for modification thereafter.

5. Each trade shall be considered as quantity that shall be required to be settled by actual delivery.

6. For each sale transaction, each trade shall be valued at the actual trade price and the trade value shall bethe trade price multiplied by the trade quantity.

7. For each buy transaction, each trade shall be valued at the weighted average price as is being announcedby the Exchange currently.

8. STT rate as prescribed shall be applied on the trade value to determine the STT liability for each transaction.A sum total of all such STT calculated for different securities transacted by a client shall be the total STTliability for the client for that trading day.

9. STT payable by the member shall be the sum total of STT payable by all his clients.

Information of STT to members

A report shall be provided to the members at the end of each trading day. This report shall contain information on thetotal STT liability, client wise STT liability and also the detailed computations for determining the client wise STT liability.The format of the report is given at Annexure I.

Client Code Modifications

As explained above, since the Exchange shall be reckoning the client code entered by the members, members areadvised to carry out client code modifications, if any, within the prescribed time. The Exchange shall not

entertain any request for modification thereafter.

Payin of funds

Members shall be required to pay the STT on T+2 day. The STT amount shall be collected as per the timelines stipulatedfor the funds payin. A separate transaction shall be created and the monies shall be collected from the settlementaccount of members through their clearing banks as per the process currently followed in respect of settlementobligations.

Failure to pay funds

Non-payment of STT will be treated as non-fulfillment of settlement obligations for the purpose of all consequentialactions against the member.

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Information of STT to clients

The contract note should specify the total securities transaction tax for the transactions mentioned therein. Membersshall issue the STT details as provided by the Exchange to their respective clients in the format given at Annexure II,along with the contract note for the transactions executed on the Exchange. Members should ensure that this Annexureshould contain the same amount of STT as specified in the daily reports downloaded to them by the Exchange. However,in respect of institutional clients the STT details statement may be given separately.

Members are also advised to peruse the STT draft rules annexed to the SEBI circular MRD/DoP/SE/Cir-32/04dated 23/9/2004 which is also available on the website of SEBI. i.e. http://www.sebi.gov.in. The members maynote that the provisions of Finance (No. 2) Act and Rules on STT will prevail.

Should you need any clarifications on the subject matter you may kindly contact following officials on board lines i.e.022- 22721233/34

Queries Contact Person Department Extension No.

System related Queries and levy, Ms. Tejal Desai ISD 8253calculation of STT

Collection of STT from members Mr. Prashant Navadgi Finance & Accounts 8558

Settlement related queries Mr. Ravindra Palande Clearing & Settlement 8308Ms Sheela Anjaria 8149

P P Kaladharan S S BolarGeneral Manager-ISD General Manager-Finance & Accounts

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Annexure I1) File Format for Memberwise/Scripwise/Clientwise S.T.T.: Pipe Separated :

File Name : CLNTSTTddmmyy.xxx

where dd – daymm – monthyy – yearxxx –Member code

Field Length Type Description

Date 8 Character Ddmmyyyy

Member Code 4 Numeric

Scrip Code 6 Numeric

Group Code 2 Character

Client Code 11 Character

Mapin No 9 Character

Pan No 10 Character

TranType 1 Character ‘N’–Normal ‘A’ –Auction ‘B’–Bad DelvAuction ‘I’ – Institution

Trans SettlNo 12 Character Xxx/yyyyyyyy for whichTradingAuction/Bad Delivery Auction isconducted

WAP Rate 9 Numeric Value in paisa(WAP rate applicable foronly net settlement)

Purchase Delivery Quantity 9 Numeric

Purchase Delivery Value 13 Numeric Value in paisa

Sale Delivery Quantity 9 Numeric

Sale Delivery Value 13 Numeric Value in paisa

Non-Delivery Quantity 9 Numeric

Non-Delivery Value 13 Numeric Value in paisa

STT on Purchase Delivery 11 Numeric Value in paisa

STT on Sale delivery 11 Numeric Value in paisa

STT on Non-Delivery 11 Numeric Value in paisa

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2) File Format for Memberwise/Clientwise S.T.T.: Pipe Separated :

File Name: MBRSTTddmmyy.xxxwhere dd – daymm – monthyy – yearxxx – Member code

Control record: Member level STT information

Field Length Type Remarks

Date 8 Character ddmmyyyy

Member code 4 Numeric

Total STT 12 Numeric Value in paisa

Detail record - Client level STT information

Field Length Type Description

Date 8 Character ddmmyyyy

Client code 11 Character

Total STT 12 Numeric Value in paisa

236

Annexure II

Statement of Securities Transaction Tax for equity share in a company or a unit of an equity-oriented fund to begiven along with the Contract notes to clients by the members.

Stock ExchangeStock Broker Code Stock Broker Name

Trading Client Code Trading Client Name

Trading Client PAN Trading Client MAPIN

Contract Note No. Contract Note Date

Serial No. Security Transactions settled Transactions settled Transactions settled Total STTby Delivery Purchase by Delivery Sale other than by Delivery

Qty Price Value STT Qty Price Value STT Qty Price Value STT

TOTAL

For

Place :Date : Authorised Signatory

237

Annexure -III

DEPUTY GENERAL MANAGERMARKET REGULATION DEPARTMENT

MRD/DOP/SE/CIR-32/04September 23, 2004

1. The Executive Directors/Managing Directors/Administrators of All Stock Exchanges

2. All Mutual Funds registered with SEBI

3. Association of Mutual Funds in India (AMFI)

Dear Sirs/Madam,

Sub : Securities Transaction Tax (STT) – Draft Rules, 2004

1. Please refer to circular No.MRD/DoP/SE/Cir-28/2004 dated August 23, 2004 on the captioned subject.

2. Pursuant to the enactment of the Finance (No.2) Act, 2004, the Government of India is expected to notify theSecurities Transaction Tax Rules, 2004, very shortly. Meanwhile, in order to facilitate the stock exchanges, theirmembers and mutual funds to put in place the necessary systems and procedures for proper implementation, thedraft rules on the captioned subject along with the proposed format of the necessary forms are enclosed.

3. Accordingly, the stock exchanges, their members and mutual funds are hereby advised to ensure that necessarysoftware and procedures for the levy, collection and remittance of STT are put in place immediately in accordancewith the enclosed draft Rules.

Yours faithfully,

V S SUNDARESAN

Encl : Copy of draft Rules along with the proposed format of forms.

238

SECURTIES TRANSACTION TAX (DRAFT) RULES

1. Short title and commencement -

(1) These rules may be called the Securities Transaction Tax (draft) Rules

(2) They shall come into force on the day of, 2004.

2. Definitions -

(1) In these rules, unless the context otherwise requires,-

(a) “Act” means the Finance (No.2) Act, 2004 ( 29 of 2004);

(b) “authorised bank” means any bank as may be appointed by the Reserve Bank of India as its agent underthe provisions of sub-section (1) of section 45 of the Reserve Bank of India Act, 1934 (2 of 1934);

(c) “Form” means a Form set out in the Appendix hereto.

(2) Words and expressions used but not defined in these Rules and defined in the Act, or the Securities Contracts(Regulation) Act, 1956, or the Income-tax Act, 1961, shall have the meanings respectively assigned to themin those Acts.

3. Value of taxable securities transaction –

For the purposes of clause (c) of section 99 of the Act, the value of a taxable securities transaction, being apurchase or sale of an equity share in a company or a unit of an equity oriented fund, entered into in a recognisedstock exchange, shall be determined in the following manner, namely:-

(a) where the equity share or unit is purchased or sold by a person on a trading day in the netted settlementmode,-

(i) the quantity of shares or units purchased or sold in each trade in that equity share or unit executed by theperson on that day, shall be multiplied by the price at which the trade is executed, to determine the tradevalue of each such trade;

(ii) the aggregate trade value of all trades in the equity share or unit by the person on that day shall be arrivedat by totalling the trade values determined under sub-clause (i);

(iii) the aggregate trade value arrived at under sub-clause (ii), shall be divided by the total quantity of the equityshare or unit traded by the person on that day, to determine the volume weighted average price of thatequity share or unit for that person for that day;

(iv) such volume weighted average price (rounded off to the nearest paisa) shall be taken to be the value of thetaxable securities transaction relating to the equity share or unit.Explanation - For the removal of doubts, itis hereby clarified that the determination of the value of the taxable securities transaction under this clausein a case where the equity share or unit is purchased or sold through a member of the stock exchange, shallbe made with reference to the trades executed in the equity share or unit under a particular client Codethrough that member;

(b) where the equity share or unit is purchased or sold by a person in the trade-for-trade settlement mode, thevalue of the taxable securities transaction shall be the price at which the equity share or unit is purchasedor sold;

(c) where the equity share or unit is purchased in the auction settlement mode, the value of the taxable securitiestransaction shall be the volume weighted average price of the equity share or unit, determined in the mannerspecified in clause (a), in respect of all trades in that equity share or unit carried out in the auction session;

239

(d) where the equity share or unit is sold in the auction settlement mode, the value of the taxable securitiestransaction shall be the price at which the equity share or unit is sold.

Explanation - For the purposes of this rule –

(i) “netted settlement mode” means a mode of settlement of transactions in a recognised stock exchangewhere the quantity of an equity share or unit purchased by a person on a trading day is set off against thequantity of that equity share or unit sold by him on that day and actual delivery is required to be taken orgiven by him as the case may be, only in respect of the net quantity purchased or sold as has not been soset off;

(ii) “trade-for-trade settlement mode” means a mode of settlement of transactions in a recognised stock exchangewhere each trade is compulsorily required to be settled by actual delivery;

(iii) “auction settlement mode” means a mode of settlement, in a stock exchange, of transactions carried out inthe auction session, being a trading session in which the stock exchange makes purchases of equity sharesor units through an auction process initiated by it, so as to settle transactions where there has been a failureto deliver such equity shares or units which were required to be delivered.

4. Rounding off value of taxable securities transaction, securities transaction tax, etc. -

The value of taxable securities transaction and the amount of securities transaction tax, interest and penaltypayable, and the amount of refund due, under the provisions of Chapter VII of the Act shall be rounded off to thenearest rupee and, for this purpose, where such amount contains a part of rupee consisting of paise then, if suchpart is fifty paise or more, it shall be increased to one rupee and if such part is less than fifty paise it shall beignored.

5. Person responsible for collection and payment of securities transaction tax in case of a Mutual Fund –

In the case of a Mutual Fund, the person responsible for collection and payment of securities transaction tax inaccordance with sub-sections (2), (3) and (4) of section 100 of the Act, shall be the trustee of the Fund, or suchother person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf.

6. Payment of Securities Transaction Tax -

Every recognised stock exchange, or, as the case may be, the trustee of every Mutual Fund or the person authorisedby the trustee, who is required to collect and pay securities transaction tax under section 100, shall pay theamount of such tax to the credit of the Central Government by remitting it into any branch of the Reserve Bank ofIndia or of the State Bank of India or of any authorised bank accompanied by a securities transaction tax challan.

7. Return of taxable securities transactions -

(1) The return of taxable securities transactions required to be furnished under sub-section (1) of section 101 ofthe Act shall,

(a) in the case of a recognised stock exchange, be in Form No. 1 and be verified in the manner indicatedtherein;

(b) in the case of a Mutual Fund, be in Form No. 2 and be verified in the manner indicated therein.

(2) The details required to be furnished in the schedules to Form No. 1 and Form No. 2 referred to in sub-rule(1) shall be furnished on a computer media, in accordance with the following, -

(a) the computer media conforms to the following specifications:-

i) CD ROM of 650 MB capacity or higher capacity; or

ii) 4mm 2GB/ 4GB (90M/ 120M) DAT Cartridge, or

240

iii) Digital Video Disc;

(b) if the data relating to the schedules is copied using data compression or backup software utility, thecorresponding software utility or procedure for its decompression or restoration shall also be furnished;

(c) the return shall be accompanied by a certificate regarding clean and virus free data.

(3) In the case of a Mutual Fund, the return referred to in sub-rule (1) shall be furnished by the trustee of the Fund, orsuch other person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf.

(4) The return of taxable securities transaction entered into during a financial year shall be furnished on or before the30th June immediately following that financial year.

8. Return by whom to be signed -

The return under sub-section (1) of section 101 of the Act shall be signed and verified –

(a) in the case of a recognised stock exchange –

(i) being a company, by the managing director or a director there of;

(ii) in any other case, by the principal officer thereof.

(b) in the case of a Mutual Fund, by the trustee or such other person managing the affairs of the Mutual Fundas may be duly authorised by the trustee in this behalf.

9. Time limit to be specified in the notice calling for return of taxable securities transaction -

Where an assessee fails to furnish the return under sub-section (1) of section 101 of the Act within the timespecified in sub-rule (4) of rule 7, the Assessing Officer may issue a notice to such person requiring him to furnish,within thirty days from the date of service of the notice, a return in the Form prescribed in rule 7 as applicable tohim and verified in the manner indicated therein.

10. Notice of demand -

Where any tax, interest or penalty is payable in consequence of any order passed under the provisions of ChapterVII of the Act, a notice of demand in Form No. 3 specifying the sum so payable shall be served upon the assessee.

11. Prescribed time for refund of tax the person from whom such amount was collected -

Every assessee, in case any amount is refunded to it on assessment under sub-section (2) of section 102 of theAct, shall, within thirty days from the date of receipt of such amount, refund the same to the concerned personfrom whom it was collected.

12. Form of Appeals to Commissioner of Income-tax (Appeals) -

(1) An appeal under sub-section (1) of section 110 to the Commissioner (Appeals) shall be made in Form No.4.

(2) The form of appeal prescribed by sub-rule (1), the grounds of appeal and the form of verification appendedthereto relating to an assessee shall be signed and verified by the person who is authorised to sign thereturn of taxable securities transactions under rule 8, as applicable to the assessee.

13. Form of appeals to Appellate Tribunal -

(1) An appeal under sub-section (1) or sub-section (2) of section 111 of the Act to the Appellate Tribunal shallbe made in Form No. 5, and where the appeal is made by the assessee, the form of appeal, the grounds ofappeal and the form of verification appended thereto shall be signed by the person specified in rule 8.

241

APPENDIXFORM NO. 1

[See rule 7 of Securities Transaction Tax Rules, 2004]

RETURN OF TAXABLE SECURITIES TRANSACTIONSSTTS – 1For recognised stock exchanges

• Please follow instructions.

• Use block letters only.

ACKNOWLEDGEMENTFor Office use only

Receipt No. .....................Date ..............……...........

Seal and Signature of ReceivingOfficial

1. NAME OF THE STOCK EXCHANGE

2 ADDRESS OF THE STOCK EXCHANGE

3. PERMANENT ACCOUNT NUMBER (PAN)

4. FINANCIAL YEAR (TRANSACTIONSRELATING TO WHICHARE REPORTED)

5. WARD/CIRCULE/RANGECODE* (Schedule) SVALUE (IN RS.)

01. (A[7])

02. (A[8])

03. (A[9])

04. (B[8])

05. (B[9])

TOTAL

6. VALUE OF TAXABLE SECURITIES TRANSACTIONS

7. TOTAL SECURITIES TRANSACTIONTAX COLLECTIBLECODE* (Schedule) VALUE (IN RS.)

01. (A[10])

02. (A[11])

242

VERIFICATION

I, (full name in block letters), son/ daughter of solemnly declare that to the best ofmy knowledge and belief the information given in this return and schedules accompanying it is correct and completeand that the total value of taxable securities transactions and other particulars shown therein are truly stated and arein accordance with provisions of Chapter VII of the Finance (No.2) Act, 2004 and Securities Transaction Tax Rules,2004.

I further declare that I am making this return in my capacity as and I am also competent to make thisreturn and verify it.

Date

Place (Name and Signature)

03. (A[12])

04. (B[10])

05. (B[11])

TOTAL

(Schedule)

8. TOTAL SECURITIES TRANSACTION TAX COLLECTED(C[5])

9. TOTAL SECURTIES TRANSACTION TAX PAID(C[6])

10. SECURITIES TRANSACTION TAX PAYABLE/ REFUNDABLE (7-9)

11. INTEREST PAYABLE UNDER SECTION 104(C[7])

12. INTEREST PAID(C[8])

243

*CODES IN RESPECT OF TAXABLE SECURITIES TRANSACTION

S.NO NATURE OF TRANSACTION CODE

1. Purchase of an equity share in a company or a unit of an equity oriented fund, where – 01

(a) the transaction of such purchase is entered into in a recognised stock exchange; and(b) the contract for the purchase of such share or unit is settled by the actual delivery or

transfer of such share or unit.

2. Sale of an equity share in a company or a unit of an equity oriented fund, where – 02

(a) the transaction of such sale is entered into in a recognised stock exchange; and

(b) the contract for the sale of such share or unit is settled by the actual delivery or transferof such or unit.

3. Sale of an equity share in a company or a unit of an equity oriented fund, where – 03(a) the transaction of such sale is entered into in a recognised stock exchange; and(b) the contract for the sale of such share or unit is settled otherwise than by the actual

delivery or transfer of such share or unit.

4. Sale of a derivative being “option in securities”, where the transaction of such sale is entered 04into in a recognised stock exchange.

5. Sale of a derivative being “futures”, where the transaction of such sale is entered into in a 05recognised stock exchange.

244

APPENDIXFORM NO. 1

[See rule 7 of Securities Transaction Tax Rules, 2004]

RETURN OF TAXABLE SECURITIES TRANSACTIONSSTTS – 2For Mutual Funds

• Please follow instructions.

• Use block letters only.

ACKNOWLEDGEMENTFor Office use only

Receipt No. .....................Date ..............……...........

Seal and Signature of ReceivingOfficial

1. NAME OF THE STOCK EXCHANGE

2. DATE OF REGISTRATION OF TRUST DEED FOR THE MUTUTAL FUND UNDER THE INDIAN REGISTERATION ACT, 1908

3. NAME AND ADDRESS OF THE TRUSTEES - SCHEDULE - A

4. NAME AND ADDRESS OF ASSET MANAGEMENT COMPANY FOR THE FUND

5. PERMANENT ACCOUNT NUMBER (PAN) OF ASSET MANAGEMENT COMPANY FOR THE FUND

6. FINANCIAL YEAR (TRANSACTIONSRELATING TO WHICHARE REPORTED)

7. WARD / CIRCULE / RANGE

8. NUMBER OF EQUIT ORIENTED FUNDS

(Schedule) (IN Rs.)9. VALUE OF TAXABLE

SECURITIES TRANSACTIONS

10. TOTAL SECURITIES TRANSACTIONTAX COLLECTIBLE (B[8])

11. TOTAL SECURITIES TRANSACTION TAX COLLECTED (C[6])

12. TOTAL SECURITIES TRANSACTIONTAX PAID (C[7])

13. SECURITIES TRANSACTION TAXPAYABLE/REFUNDABLE (10-12)

245

VERIFICATION

I, (full name in block letters), son/ daughter of

solemnly declare that to the best of my knowledge and belief the information given in thisreturn and schedules accompanying it is correct and complete and that the total value of taxable securities transactionsand other particulars shown therein are truly stated and are in accordance with provisions of Chapter VII of the Finance(No.2) Act, 2004 and Securities Transaction Tax Rules, 2004.

I further declare that I am making this return in my capacity as and I am also competent to make this returnand verify it.

Date

Place( Name and Signature )

14. INTEREST PAYABLE UNDERSECTION 104 (C[8])

15. INTEREST PAID (C[9])

246

FORM NO. 3[See rule 10 of Securities Transaction Rules, 2004]

Notice of demand

To

Status

PAN

1. This is to give you notice that for the financial year a sum of Rs. , details of which aregiven on the reverse, has been determined to be payable by you.

2. The amount should be paid to the Manager, authorized bank/ State Bank of India/ Reserve Bank of India at within 30 days of the service of this notice. The previous approval of the Additional/ Joint

Commissioner of Income-tax has been obtained for allowing a period of less than 30 days for the payment of theabove sum. A challan is enclosed for the purpose of payment.

3. If you do not pay the amount within the period specified above, you shall be liable to pay simple interest at one percent for every month or part of a month from the date commencing after end of the period aforesaid in accordancewith section 220(2) of the Income-tax Act read with section 109 of the Finance (No.2) Act, 2004.

4. If you do not pay the amount of the tax within the period specified above, penalty (which may be as much as theamount of tax in arrear) may be imposed upon you after giving you a reasonable opportunity of being heard inaccordance with section 221 of the Income-tax Act read with section 109 of the Finance (No.2) Act, 2004.

5. If you do not pay the amount within the period specified above, proceedings for the recovery thereof will be takenin accordance with section 222, 227, 229 and 232 of the Income-tax Act, 1961 read with section 109 of theFinance (No.2) Act, 2004.

6. If you intend to appeal against the assessment/ penalty, you may present an appeal under section 110 of ChapterVII of the Finance (No.2) Act, 2004, to the Commissioner of Income-tax (Appeals) within thirty days ofthe receipt of this notice, in Form NO. 4 duly stamped and verified as laid down in that form.

7. The amount has become due as a result of the order of the Commissioner of Income-tax (Appeals) under section110 of the Chapter VII of the Finance (No.2) Act, 2004. If you intend to appeal against the aforesaid order, you maypresent an appeal under section 111 of Chapter VII of the said Act to the Income-tax Appellate Tribunal ……withinsixty days of the receipt of that order, in Form No. 5, duly stamped and verified as laid down in that form.

Place

Date Assessing Officer

Address

Notes:

1. Delete in appropriate paragraphs and words.

2. If you wish to pay the amount by cheque, the cheque should be drawn in favour of the Manager, authorized bank/State Bank of India/ Reserve Bank of India.

3. If you intend to seek extension of time for payment of the amount or propose to make the payment by instalments,the application for such extension or as the case may be, permission to pay by instalments, should be made to theAssessing Officer before the expiry of the period specified in paragraph 2. Any request received after the expiry ofthe said period will not entertained in view of the specific provisions of section 220(3) of the Income-tax Act.

247

FORM NO. 4

[See rule 12 of Securities Transaction Rules, 2004]Appeal to the Commissioner of Income-tax (Appeals)

Designation of the Commissioner (Appeals)

*No of

1. Name and address of the appellant

2. Permanent Account Number

3. Financial year in connection with which the appeal is preferred

4. Assessing Officer passing the order appealed against

5. Section and sub-section of the Chapter VII of the Finance (No.2) Act, 2004, under which the Assessing Officerpassed the order appealed against and the date of such order

6. Where the appeal relates to any assessment or penalty, the date of service of the relevant notice of demand

7. In any other case, the date of service of the intimation of the order appealed against

8. Section and sub-section of the Chapter VII of the Finance (No.2) Act, 2004, under which the appeal is preferred.

9. Where a return has been filed by the appellant for the financial year in connection with which the appeal ispreferred, whether tax due on the value of taxable securities transaction returned has been paid in full (if theanswer is in the affirmative, give details of date of payment and amount paid)

10. Relief claimed in appeal

11. **Where an appeal in relation to any other financial year is pending in the case of the appellant with anyCommissioner (Appeals), give the details as to the -

(a) Commissioner (Appeals), with whom the appeal is pending;

(b) financial year in connection with which the appeal has been preferred;

(c) Assessing Officer passing the order appealed against;

(d) section and sub-section of the Chapter VII of the Finance (No.2) Act, under which the Assessing Officerpassed the order appealed against and the date of such order

12. Address to which notices may be sent to the appellant

Signed(Appellant)STATEMENT OF FACTSGROUNDS OF APPEAL

Signed(Appellant)

248

Form of Verification

I, , the appellant, do hereby declare that what is stated above is true to the best of my informationand belief.

Place

Date Signature

Status of appellant

Notes:

1. The form of appeal, grounds of appeal and the form of verification appended thereto shall be signed by a personin accordance with the provisions of rule 9 of Securities Transaction Rules, 2004.

2. The memorandum of appeal, statement of facts and the grounds of appeal must be in duplicate and should beaccompanied by a copy of the order appealed against and the notice of demand in original, if any.

3. Delete the inappropriate words.

4. *These particulars will be filled in in the office of the Commissioner (Appeals).

5. If the space provided herein is insufficient, separate enclosures may be used for the purpose.

6. **If appeals are pending in relation to more than one financial year, separate particulars in respect of each financialyear may be given.

7. The memorandum of appeal shall be accompanied by a fee of one thousand rupees.

8 The fee should be credited in a branch of the authorized bank or a branch of the State Bank of India or a branchof the Reserve Bank of India after obtaining a challan from the Assessing Officer.

249

FORM NO. 5

[See rule 13 of Securities Transaction Rules, 2004]

Form of appeal to the Appellate Tribunal

In the Income-tax Appellate Tribunal

*Appeal No of

Versus

APPELLANT RESPONDENT

1. The State in which the assessment was made

2. Section of the Chapter VII of the Finance (No.2) Act, 2004 under which the order appealed against was passed

3. The Commissioner (Appeals) passing the appealed against

4. Financial year in connection with which the appeal is preferred

5. Total value of taxable securities transactions declared by the assessee for the financial year referred to in item 3

6. Total value of taxable securities transactions as computed by the Assessing Officer for the financial year referredto in item 3

7. The Assessing Officer passing the original order

8. Section of the Chapter VII of Finance (No.2) Act, 2004 under which the Assessing Officer passed the order

9. Date of communication of the order appealed against

10. Address to which notices may be sent to the appellant

11. Address to which notices may be sent to the respondent

12. Relief claimed in appeal

GROUNDS OF APPEAL

1. 2. 3. 4. etc.

Signed Signed(Authorised representative, if any) Signed(Appellant)

Verification

I, , the appellant, do hereby declare that what is stated above is true to the best of my informationand belief.

Signed

Notes:

1. The memorandum of appeal must be in triplicate and should be accompanied by two copies (at least one of whichshould be a certified copy) of the order appealed against, two copies of the relevant order of the Assessing Officer,two copies of the grounds of appeal before the first appellate authority, two copies of the statement of facts, if any,filed before the said appellate authority.

250

2. The memorandum of appeal by an assessee under section 111(1) of the Chapter VII of Finance (No.2) Act, 2004must be accompanied by a fee of one thousand rupees.

It is suggested that the fee should be credited in a branch of the authorized bank or a branch of the State Bank ofIndia or a branch of the Reserve Bank of India after obtaining a challan and the triplicate challan sent to theAppellate Tribunal with a memorandum of appeal. The Appellate Tribunal will not accept cheques, draft, hundiesor other negotiable instruments.

3. The memorandum of appeal should be written in English or, if the appeal is filed in a Bench located in any suchState as is for the time being notified by the President of the Appellate Tribunal for the purposes of rule 5A of theIncome-tax (Appellate Tribunal) Rules, 1963, the, at the option of the appellant, in Hindi, and should set forth,concisely and under distinct heads, the grounds of appeal without any argument or narrative and such groundsshould be numbered consecutively.

4. *The number and year of appeal will be filed in the office of the Appellate Tribunal.

5. Delete the inapplicable columns.

6. If the space provided is found insufficient, separate enclosures may be used for the purpose.

251

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NOTES:

1. This Form must be used by a Mutual Fund only.

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4. Details required in Schedule C be given separately for each month for each equity oriented fund set up by theMutual Fund and sub-total for each month be also given.

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Notice no : 20041005-7Notice date : Tuesday, October 05, 2004Subject : Securities Transaction Tax (STT) - Equity SegmentSegment Name : Equity

With reference to our Notice Nos. 20040927-13 and 20040930-5 dated September 27, 2004 and September 30, 2004respectively regarding Securities Transaction Tax (STT) – Equity Segment, we would like to inform the members thatin the Equity Segment, the Exchange is charging STT on institutional transactions based on the institutional ID (DFI,FII, MF and Bank) captured from the BOLT order screen.

Accordingly, all the institutional Buy and Sell transactions are treated separately for the calculation of STT and all thesetransactions are treated as delivery based transactions. No netting of institutional transactions is allowed for the calculationof STT and the STT applicable on delivery based transactions is being levied on such transactions.

Members are requested to refer to Annexure I of Notice No. 20040927-13 dated September 27, 2004, wherein TranType ‘I’ indicates STT details pertaining to the institutional transactions.

For any clarification you may kindly contact the following officials on board lines i.e. 022- 22721233/34 :

Contact Person Extension No. Mobile No.

Ms. Tejal Desai 8253 9820796495

Mr. Vijay H. Mali 8592 9819555437

P. P. Kaladharan S. S. BolarGeneral Manager General ManagerISD Finance & Accounts

256

Contact Person Department Extension No. Mobile No.

Prashant Navadgi Investments & Accounts 8558 9819555359

Arun P DhanawadeAGM, Investments and Accounts

Notice no : 20050520-14Notice date : Friday, May 20, 2005Subject : Securities Transaction Tax (STT) - Equity & Derivatives SegmentSegment : NameGeneral

To : All Members of the Exchange

SUBJECT : SECURITIES TRANSACTION TAX- EQUITY & DERIVATIVES SEGMENT

This has reference to Finance Bill, 2005 introduced by the Hon’ble Finance Minister on 28th February 2005. The saidFinance Bill, 2005 has received the assent of the President of India on 13th May 2005.

As per the Finance Bill, 2005, sub clause ( c ) of clause 124 sought to amend the section 98 of the Finance (No. 2)Act, 2004 relating to charge of Securities Transaction Tax as under :-

Sr. Taxable Securities Old Rate Revised PayableNo. rate by

1. Purchase of an equity share in a company or a unit of 0.075 % 0.1% Purchaseran equity oriented fund, where –(a) the transaction ofsuch purchase is entered into in a recognised stockexchange; and(b) the contract for the purchase of suchshare or unit is settled by the actual delivery or transferof such share or unit.

2. Sale of an equity share in a Seller company or a unit of 0.075 % 0.1%an equity oriented fund, where — a) the transaction ofsuch sale isentered into in a recognisedstock exchange;and(b) thecontract for the sale of suchshare or unit issettled by theactual delivery or transfer of suchshare orunit.

3. Sale of an equity share in a company or a unit of an 0.015 % 0.02%Seller equity oriented fund, where—(a) the transactionof such sale is entered into in a recognised stockexchange; and(b) the contract for the sale of such shareor unit is settled otherwisethan by the actual delivery ortransfer of such share or unit.

4 Sale of a derivative, where the transaction of such sale 0.01 % 0.0133% Selleris entered into in a recognised stock exchange.

The change in STT rates will come into effect from trading day 1st June 2005. Kindly note that the Exchange willcontinue to adopt the existing procedures for calculation, levy and collection of STT, the only exception

being change in STT rates. Members can refer to earlier notice nos. 20040927-13 dated 27/9/04 and 20040927-15dated 27/9/04 for detailed procedures regarding levy and collection of STT.

Members are requested to note the above and once again ensure compliance as per above-mentioned BSE notices

For further clarifications on the subject matter you may kindly contact the following official on BSE board lines i.e.022- 22721233/34

257

Notice no : 20040420-12Notice date : Tuesday, April 20, 2004Subject : Mandatory Use of STP system for all Institutional trades executedon the Stock ExchangesSegment Name : General

April 20, 2004

Sub : Mandatory Use of STP system for all Institutional trades executed on the Stock Exchanges

SEBI vide circular No. DNPD/Cir-22/04 dated April 01, 2004 has, inter-alia, advised that all institutional trades executedon the stock exchanges would be mandatorily processed through the Straight Through Processing (STP) System w.e.f.July 01, 2004. A copy of the said SEBI circular, the contents of which are self-explanatory, is enclosed as Annexure- Afor the information of the members.

Niraj Karwa

Manager- Clearing and Settlement.

Encl.a.a.

258

Annexure- A

PRATIP KAREXECUTIVE DIRECTOR

DNPD/Cir- 22 /04April 01, 2004

ToAll Stock Exchanges, Depositories and Custodians.

Dear Sir,

Mandatory use of STP system for all institutional trades executed on the stock exchanges.

Straight Through Processing (STP) is generally understood to be a mechanism that automates the end to end processingof transactions of financial instruments. It involves use of a system to process or control all elements of the work flowof a financial transaction, what are commonly known as the Front, Middle, Back office and General Ledger. In otherwords, STP allows electronic capturing and processing of transactions in one pass from the point of order originationto final settlement. STP thus streamlines the process of trade execution and settlement and avoids manual entry andre-entry of the details of the same trade by different market intermediaries and participants. Usage of STP enablesorders to be processed, confirmed, settled in a shorter time period and in a more cost effective manner with fewererrors. Apart from compressing the clearing and settlement time, STP also provides a flexible, cost effectiveinfrastructure, which enables e-business expansion through online processing and access to enterprise data.

SEBI vide letter dated October 3, 2002 informed the stock exchanges, depositories and custodians that it proposed tointroduce STP for electronic trade processing with a common messaging standard ISO 15022 w.e.f December 2, 2002.Accordingly, STP was launched in India on November 30, 2002. Currently, STP is being used by the market participantson a voluntary basis. To facilitate STP, SEBI has also issued circulars SMDRP/POLICY/Cir-15/00 dated December 15,2000 & circular SEBI/SMD/SE/15/2003/29/04 dated April 29, 2003 which permitted the issue of electronic contractnotes with digital signature obtained from a valid Certifying Authority provided under the Information Technology Act,2000 (IT Act) and circular no. DNPD/Cir-9/04 dated February 3, 2004 & circular no. SEBI/MRD/SE/Cir-11/2004 datedFebruary 25, 2004 directing exchanges to amend their bye-laws, rules and regulations for the equity and the debtsegment to streamline the issuance of electronic contract notes as a legal document like the physical contract note.Exchanges are in the process of amending their bye-laws, rules and regulations.

While several STP Service Providers have been providing STP service to the market participants, however, there wasno inter-operability between the STP Service Providers.

To resolve the issue of inter-operability between the STP Service Providers, it has been decided in consultation withthe stock exchanges and the STP Service Providers that a STP Centralised Hub would be setup. Currently this STPCentralised Hub has been setup and made operational by NSE. NSE has obtained the necessary approvals fromDepartment of Telecommunications (DoT) as an Internet Service Provider (ISP). Subsequently this STP CentralisedHub would be further developed jointly with BSE.

In view of the aforesaid developments, it has been decided that all the institutional trades executed on the stockexchanges would be mandatorily processed through the STP System w.e.f July 01, 2004. This circular is being issuedto provide adequate notice to the market and market participants about the mandatory use of STP Service for institutionaltrades. A circular containing the detailed process flow, role and responsibilities of the STP Service Providers and theSTP Centralised Hub, standard agreement between the STP Service Providers and the STP Centralised Hub wouldbe issued shortly.

This circular is being issued in exercise of powers conferred by section 11 (1) of the Securities and Exchange Boardof India Act, 1992, read with section 10 of the Securities Contracts(regulation) Act 1956, to protect the interests ofinvestors in securities and to promote the development of, and to regulate the securities market.

Yours faithfully,

PRATIP KAR

259

Notice no : 20040705-10

Notice date : Monday, July 05, 2004

Subject : Straight Through Processing & use of ExchangeAllotted Unique Client Codes

Segment Name : General

Members’ attention is drawn to Securities and Exchange Board of India (SEBI) Circular No. DNPD/CIR-25/2004 datedJune 10, 2004 (copy enclosed) regarding “Transaction work flow for the system of Straight Through Processing in theIndian securities Market & standardization of the messaging formats.”

Pursuant to Para 3 (g)(vii) of the above- mentioned Circular, members‘ are required to input the Unique Client Codeallotted by the Exchange(s) in the prescribed messaging standard in the case of Institutional Investors like financialinstitutions , banks, etc..

Further, SEBI vide its letter SEBI/MRD/UCC/AT/13976/2004 dated June 30, 2004 has directed the Exchanges to ensurethat all the transactions executed on or after July 1, 2004 on behalf of the Banks & Financial Institutions through thetrading platform of the Stock Exchanges necessarily carry this Unique Client Code allotted by the Exchange (s).

Members are required to take note of the same & ensure compliance with SEBI guidelines in this regard.

For any clarification in the matter, the members may contact the following officials on Tel. Nos. - 22721233 / 34 :

NAME INTERCOM NO.

MUKESH KUWAD 8497

HITESH SAVLA 8585

Devika Shah Mayank J. MehtaGeneral Manager Asst. General ManagerMembership & Inspection Inspection

260

CHIEF GENERAL MANAGERDERIVATIVES AND NEW PRODUCTS DEPARTMENTDNPD/Cir-25/04June 10, 2004

All Exchanges, Clearing Corporation / Clearing House, STP Centralised Hub Depositories, Custodians, AMFI and STPservice providers

Sub : Transaction work flow for the system of Straight Through Processing in the Indian Securities Market andstandardisation of the messaging formats

Dear Sir,

1. This is in continuation to our previous circular no. DNPD/Cir-9/04 dated February 3, 2004 & circular no. SEBI/MRD/SE/Cir-11/2004 dated February 25, 2004 on the issuance of electronic contract notes as a legal documentlike the physical contract note for the equity and debt segments, circular no. DNPD/Cir-22/2004 dated April 1,2004 mandating the use of the Straight Through Processing (STP) system for all institutional trades w. e. f. July 1,2004, circular no. DNPD/Cir-23/04 dated April 27, 2004 prescribing the detailed system flow of the STP systemand circular no. DNPD/Cir-24/04 dated May 26, 2004 prescribing the SEBI (STP centralised hub and STP serviceproviders) Guidelines, 2004.

2. SEBI in consultation with the STP centralised hub, STP service providers and the STP users has prescribed thetransaction work flow for the STP system. All institutional investors shall follow the following transaction work flowon a mandatory basis from July 1, 2004 :

a. A contract note in electronic form in the prescribed format (IFN 515 messaging format) shall be issued by thebroker & sent to the custodian and / or the institutional investor.

b. In case the contract note is processed directly by the institutional investor, the institutional investor shallsend the trade confirmation of acceptance or rejection of the contract note to the broker by using the IFN598 messaging format. The custodian shall also send the confirmation of acceptance or rejection of suchcontract note to the broker using the messaging standard IFN 548.

c. In case the contract note is processed by the custodian on behalf of the institutional investor, the custodianshall send the confirmation of acceptance or rejection of the contract note to the broker by using the IFN548 messaging format.

d. The institutional investor shall send settlement instructions to its custodian in IFN 540 to IFN 543 messagingformats to the custodian for the following trade types:

i. IFN 540: settlement instruction for a clearing house buy trade

ii. IFN 541: settlement instruction for a delivery-v/s-payment (DVP) buy trade

iii. IFN 542: settlement instruction for a clearing house sell trade

iv. IFN 543: settlement instruction for a delivery-v/s-payment (DVP) sell trade

e. The custodian shall confirm / reject the execution of the settlement instructions to the institutional investorin IFN 544 to IFN 547 messaging formats in the following manner:

i. IFN 544: confirmation / rejection of an instruction received in messaging format IFN 540

ii. IFN 545: confirmation / rejection of an instruction received in messaging format IFN 541

iii. IFN 546: confirmation / rejection of an instruction received in messaging format IFN 542

iv. IFN 547: confirmation / rejection of an instruction received in messaging format IFN 543

f. It is clarified that if a message (for the activities mentioned above) is sent using the STP centralised hubframework from one user to another user, then the confirmation / rejection for such a message shall also besent using the STP centralised hub framework.

261

3. SEBI vide circular no. DNPD/Cir-9/04 dated February 3, 2004 had prescribed the format of the contract note inelectronic form. After deliberation with the STP service providers and the market participants the following changesare incorporated to the existing messaging format (IFN 515):

a. The mandatory requirement of mentioning the relevant bye-laws / rules / regulations of the exchange subjectto which the said contract note is being issued on each contract note stands modified in the followingmanner:

i. The requirement is not mandatory but optional

ii. The broker shall ensure that the relevant bye-laws / rules / regulations of the exchange subject towhich the contract note is being issued, is mentioned in the broker-client agreement and the tripartiteagreement between thebroker-sub-broker-client agreement (if applicable).

iii. The existing field for the above provision shall not be deleted and may be used as a free text field forone constituent to communicate remarks (if any) to another constituent.

b. The clause of ‘payment of consolidated stamp duty’ for each contract note shall be mentioned in the broker-client agreement and the tripartite agreement between the broker-sub-broker-client agreement (if applicable).The said clause may be stated in the free text field (as mentioned in point 3 (a (iii))) of each contract note.

c. In the field “market type” (field 70E) a category of ‘TT’ i.e. trade for trade and ‘OT’ i.e. Others shall be addedto represent the supplementary categories of market types.

d. The order time was prescribed as a mandatory field in the contract note. The order time shall now beincluded in the optional fields.

e. There are certain securities which are not de-materalised and hence do not have an ISIN code. For suchsecurities (where ISIN number is not available) the STP users would be required to input the security codegiven by the exchange in the ISIN number field. In case the number length of the exchange scrip code isshorter than the prescribed field length of 12 characters, the code shall be prefixed with zeros.

f. In order to maintain a complete audit trail, it is clarified that in case an electronic contract note is rejected,the custodian (in messaging format IFN 548) or the fund manager (in messaging format IFN 598) shall berequired to send a rejection message to the broker. Only on receipt of the rejection message, the brokershall cancel the rejected contract note and issue a fresh contract note bearing a new number.

g. In order to bring in standardisation in the input of the identification codes in the prescribed messagingstandards, it is clarified that the following codes shall be used by the various entities:

i. Brokers: SEBI registration number (until MAPIN ID is available for every broker)

ii. Mutual Funds and schemes of Mutual Funds: SEBI registration number for Mutual Funds and Uniqueclient code issued by the exchanges for schemes (until MAPIN ID is available for each scheme of amutual fund)

iii. FIIs and sub-accounts: SEBI registration number for FII and Unique client code issued by theexchanges for sub-account (until MAPIN ID is available for each FII and their sub-accounts)

iv. Custodians: SEBI registration number (until MAPIN ID is available for every custodian)

v. STP service providers and STP centralised hub: MAPIN ID

vi. Depositories and exchanges / clearing house / clearing corporation: MAPIN ID.

vii. Other Institutional Investors like financial institutions, banks etc.: Unique client code issued by theexchanges (until MAPIN ID is available for each Institutional Investor)

h. All market participants shall issue the electronic contract note for institutional trades in the modified formatenclosed Annexure I.

262

4. The prescribed messaging formats for IFN 540, IFN 541, IFN 542, IFN 543, IFN 544, IFN 545, IFN 546, IFN 547,IFN 548 and IFN 598 are enclosed in Annexure II. After consultation with the market participants and confirmingtheir preparedness, it has been decided to make these messaging formats (in addition to IFN 515) mandatory forall institutional trades w. e. f. July 1, 2004.

5. It is reiterated that the STP system shall be initially mandatory for all institutional trades in the equity segment w.e. f. July 1, 2004.

6. The standard terms of contract as are required to be mentioned in the Contract Notes as per the Bye-laws andRegulations of exchanges, which are not contained in electronic contract notes, shall be incorporated in the ClientBroker Agreement or where applicable, the Tripartite Agreement between the stock broker, sub-broker and theclient. The stamp duty in respect of the electronic contract notes shall be paid by the broker.

7. This circular is being issued in exercise of powers conferred by section 11 (1) of the Securities and ExchangeBoard of India Act, 1992, read with section 10 of the Securities Contracts(regulation) Act 1956, to protect theinterests of investors in securities and to promote the development of, and to regulate the securities market.

Yours sincerely,

N. PARAKHEncl.

263

1. Messaging Format for IFN 515 (modified format)

2. Messaging Format for IFN 540

3. Messaging Format for IFN 541

4. Messaging Format for IFN 542

5. Messaging Format for IFN 543

6. Messaging Format for IFN 544

7. Messaging Format for IFN 545

8. Messaging Format for IFN 546

9. Messaging Format for IFN 547

10. Messaging Format for IFN 548 (C to B)

11. Messaging Format for IFN 548 (C to I)

12. Messaging Format for IFN 598 (I to B)

264

Notice no : 20031112-5Notice date : Wednesday, November 12, 2003Subject : Norms for imposition of late fees, fines and penalties - Cash SegmentSegment Name : General

Contents :

The Exchange has reviewed and rationalised the existing norms for imposing late fees, fines and penalties. The revisednorms have been approved by the Disciplinary Action Committee (DAC) of the Exchange in its meeting held on October22, 2003.

Statement indicating the nature of irregularity/violation and the consequential late fees, fines and penalties that wouldbe levied is enclosed for the information of the members. The members may please note that these norms shall beapplied for the violations observed during the course of inspection conducted on or after the date of this notice.

It may be noted that the actions including fines for violations are only indicative. In case of a large number of instancesof a violation involving large amount of funds / large quantity of securities or of repetitive nature, DAC may take suchstrict action as it may deem fit including levy of higher fines / suspension / expulsion.

The members are once again advised to ensure compliance with the various Rules, Byelaws & Regulations of theExchange.

In case the members require any clarification, they may please contact any of the following officials :

Sr. No. Name Intercom No.

1. Mr. Ranjan Prabhu 8214

2. Ms. Srividhya Subramanian 8404

Kevin Desouza Mayank MehtaChiefGeneral Manager Asst. General Manager Inspection & Membership Inspection

265

List of violations alongwith indicative fines.

Sr. Violation Rule/Byelaw/ Upto 3 MultipleRegulation/ instances instancesNotice no.

Contract Notes

1. Non-issue of contract notes. Bye law 219 & Exchange Rs. 5,000 Rs. 10,000Notice No. 5116/93 datedNovember 11, 1993.

2. Contract Note not as per the format prescribed Regulation 14.2/ Advice Rs. 5,000by the Exchange Exchange notice No.

20021109-9 datedNovember 9, 2003.

3. Board Resolution / Power of Attorney for signing of Exchange Advice AdviceContract Notes not submitted to the Exchange notice no. 1024/98

dated March20, 1998.

4. Contract notes not issued within 24 hours of trade Bye law 247 Advice Rs.10,000execution or duplicates of the contract notes A/Exchange Notice No.issued not acknowledged by clients / no proof 4914/96 datedof delivery. August 3, 1996

5. Duplicates of the contract notes issued not Exchange notice no. Advice Warningmaintained. Counter foils maintained having no 4850/97 datedadequate details. December 10, 1997.

6. Details of the trade have not been attached as an Notice no. 4646/97 Advice WarningAnnexure to the contract note (original / duplicate) dated November 29, 1997issued in case of consolidated trade shown incontract note.

7. Instances of brokerage charged at a rate Regulation The Member to be advisedhigher than the permissible maximum. 14.1 to refund the excess

Brokerage charged to theconstituents and a fine of anequivalent amount or Rs5000/-, whichever is higher,be levied on the Member.

8. Execution of Negotiated Deals (including Cross Notice no. 245012/99 Rs.1,00,000 Rs. 2,00,000Deals) not through price and order matching dated Sept. 2, 1999.mechanism of the Exchange.

9. Execution of transactions in securities not listed/not Byelaw 45, 49 & 50. Refer the matter to DACpermitted on the Exchange.

10. Difference in rate mentioned in the contract note Notice No. 5116/93 Excess amount to beand the executed rate. dated November returned to the client and

fine 11, 1993.equal to twicethe excess amount chargedor Rs25,000/- whichever ishigher, to be levied on themember

266

Client Codes

11. Transfer of trades executed for one client to Notice no. 101502/2001 Advice Rs. 5,000another client. dated October 12, 2001.

12. Transfer of trades from Own account to client Notice no. 101502/2001 Rs. 5,000 Rs.10,000account or vice-versa dated October 12, 2001.

client account or vice-versa 101502/2001 dated Octo. Rs. 5,000 Rs.10,00012, 2001.

13. Evasion of margin by entering wrong client code Notice no. 101502/2001 Rs. 5,000 Rs.10,000in the system. dated October 12, 2001.

14. Use of fictitious client codes during order Notice no. 101502/2001 Rs. 10,000 Rs. 20,000placement. dated Octo.12, 2001.

Spot Transaction

15. Not taken written consent from the client for Byelaw 199/ Exchange Rs.5,000 Rs.10,000principal to principal transactions. Notice No. 4914/96

dated Augu. 13, 1996.

16. Contract Notes not issued / not in prescribed Reg. 14/ Exchange Rs.5,000 Rs.10,000Form ‘B’ for principal to principal transactions. Notice No. 4914/96

dated Augu.13, 1996

17. Transactions done on a spot basis are not at all SEBI Circular no. Rs.5,000 Rs.10,000reported to the Exchange. SMD/RCG/ CIR/(BKG)/

293/95 dated March14, 1995.

18. Transactions done on a spot basis are not reported SEBI Circular no. Advice Rs. 5,000 to the Exchange within the prescribed time limit. SMD/RCG/ CIR/(BKG)/

293/95 dated March14, 1995.

19. Transactions done on a spot basis are not Section 2(i) of the SCRA, 1% of the 2% of thesettled within the prescribed time limit. 1956. transaction transaction

value or value orRs. 5,000/- Rs.10,000/-whichever whicheveris lower. is higher.

Books of accounts & other documents

20. • Not maintained Reg. 17(1) of the SEBI 10,000/- N.A.(Stock Brokers &Sub Brokers) Rules, 1992

• Not maintained properly 5,000/- N.A.• Not made available for verification when asked for Reprimand N.A.• Not maintained for branch / sub-broker 10,000/- N.A.

per office5,000/- per office

• Not maintained properly for sub-broker• Not made available for branch / sub-broker when Reprimand N.A.asked for.

Sr. Violation Rule/Byelaw/ Upto 3 MultipleRegulation/ instances instancesNotice no.

267

21. Segregation of Exchange wise / Segment wise 10,000/- N.A.client ledgers not maintained.

22. Incomplete / Non-maintenance of registers Exchange notice no. Advice N.A.(Register of Securities / Register of Transactions / 4850/97 datedRegister of Complaints/ Dividend ledge / Margin 10.12.1997Deposit Book)

Dealing with clients

2. • Client’s funds not routed through designated Bye law 247A/ Rs.25,000 N.A.‘Client Account’/Non maintainance of Client Exchange Notice nos.account. 7031/94 & 4850/97

dt.10.12.1997• Non-segregation of own and client transactions Reprimand 10,000in separate bank accounts• Use of Client account for non specified purposesUse of clients’ funds for ownpurposes / Misuse of clients’funds / Unauthorised transfer of funds from one Rs.50,000 Rs.1,00,000client’s account to another client’s account.• Delay in payments of funds to the clients. Advice Rs.5,000

(In caseinordinatedelays ofthan week,double thefine amount tobecollected.)

• Non-payment or delay in payment of dividend Advice Rs.5,000amounts to constituents / non- reconciliation ofdividend account

24. • Securities due to the clients transferred to the Bye law 247A Reprimand Rs.5,000members’ beneficiary account Exchange notice nos.

7031/94 & 4850/97 dated10.12.1997

• Securities due to one client transferred to another Rs.50,000 Rs.1,00,000client OR Securities due to the clients used formeeting the pay-in obligation of the member/otherclient. Rs.5,000• Delay in delivery of securities to clients.

25. Transaction with clients in cash. Notice no. 5 dated Advice03/09/2003

26. Deliver / Receive securities other than from Notice no.5 dated Advice Rs.5,000respective Clients Beneficiary Account. or under September 3, 2003.approved scheme.

27. Half yearly statement of accounts for funds Notice no.9 dated Advice Rs. 5,000/securities not sent to the clients. January 14, 2003.

Client Registration

28. • Non execution of Client Registration Form or Notice no. 1798/97 Advice Rs.10,000 maintaining incomplete client database. dated April 24, 1997• Non execution of member- client agreement or Advice Rs.10,000 agreement not in prescribed format.

Sr. Violation Rule/Byelaw/ Upto 3 MultipleRegulation/ instances instancesNotice no.

268

Sr. Violation Rule/Byelaw/ Upto 3 MultipleRegulation/ instances instancesNotice no.

29. Not assigned unique client codes and / or not Notice no. 20030115-5 Rs 5000 Rs 10,000mapping the client code with PAN/ Passport etc. dated January 15, 2003in the back office, and/or not registering the clientdetails on BOLT

Dealing with Intermediaries

30. Dealing with un-registered sub-brokers Notice no. 623111/2000 Rs.25,000 Rs.25,000dated September per un- per un-18, 1999. registered registered

Sub broker. Sub broker.

31. Members of other Exchanges routing orders of Notice no. Advice the member totheir clients through BOLT, without being 54809/2000 comply with registrationregistered as Sub-brokers with SEBI. dated July 1, 2000 requirement within one

month. If not complied, fineof Rs. 25,000/- peunregistered sub brokerto be imposed.

32. Sharing Commission/ brokerage without Bye law 218/ Exchange Rs. 5,000 Rs10,000/registering such persons as Remisiers notice no. 2628/97with the Exchange. dated 9.6.1997.

33. Sharing of brokerage with -another member Byelaw 218 Exchange 5 ,000/- 10,000/--an employee of another member or a person Notice No. 2628/97for or with whom trading members are forbidden Date 9.6.1997to do business.

34. Allotting BOLT TWSs to another member of the Notice no. 104616/2001 Rs.15,000 Rs.15,000Exchange. dated November per instance per instance

12, 2001. and de- and de-activation activationof the said of the saidBOLT TWS BOLT TWS

35. Executing trades for another member of the Rs. 10,000 Rs.25,000Exchange.

36. Done business on behalf of suspended/defaulter/ Bye- Law 358 (vi) Rs.10,000 Rs.25,000expelled members without obtaining priorpermission of the Exchange.

Margins

37. Non submission/late submission of Compliance Notice no. 5 dated Fine of N.A.Certificate regarding collection of up-front September 18, 2003 Rs.100 daymargin from non-institutional clients. till the date

of submission.

38. Non collection / short collection of a margin from Notice No.123621/2002 Rs.5,000 Refer thenon-institutional clients on their respective net May 21,2002. matteropen positions by the member / sub-broker. to DAC

39. Non collection of compliance certificate from Notice no. 84618/2001 Rs.5,000 Refer thesub-broker(s) regarding collection of margin dated April 26, 2001. matter tofrom non-institutional clients on their respective DACnet open positions.

40. Submission of wrong compliance certificate Notice no. 123621/2002 Rs.5,000 Refer theregarding collection of up-front margin matterfrom non- institutional clients. May21,2002. to DAC

269

Others

41. Non receipt of reply seeking clarification on Advice Rs.5,000/- inspection.

42. Submitting late/wrong Compliance Certificate i) The Compliance ofregarding implementation of suggestions made the Inspection Reportat the time of inspection observations should be

submitted within 30 days /prescribed time of thedate of receipt of theletter communicating theobservations failing which, afine of Rs.5,000/- may beimposedii) If it is observed that the member has submitted awrong compliancecertificate, a fine uptoRs.25,000/- may beimposed.

43. Delay / Non submission of Notice No.7 Non-submission ofAudit Report, Audited Accounts dated July documents by due dateand Networth Certificate. 10, 2003. • Fine of Rs. 100/- perNote : Submission of incorrect, day till the date ofunaudited or not in a submission of theprescribed format will be treated documents.as non-submission of the same. Non-submission of

documents after twomonths of due date:·• Fine of Rs. 500/- perday after two monthsof due date untilsubmission of thedocuments.

44. Non-attendance of DAC To be referred to N.A.meetings without prior DACintimation.

45. Involved in Fund Based activities SMD/ POLICY/ Advice Rs.20,000CIR-6/97 datedMay 7,1997.

Sr. Violation Rule/Byelaw/ Upto 3 MultipleRegulation/ instances instancesNotice no.

Notes :-

(1) In respect of repeated violations, action may be restructured to cases where multiple instances of a violationhave been observed in both the last annual inspection of a member and the current inspection and 50% ofthe fine applicable for multiple instances of the violation be levied additionally. In all other circumstances ofrepeat violation, the fine structure in respect of initial violations to be followed.

(2) The above actions including fines are only indicative. In case of a large number of instances of a violationinvolving large amount of funds / large quantity of securities or of repetitive nature, the Exchange may takesuch strict action as it may deem fit including levy of higher fines / suspension / expulsion.

270

Notice no : 20041019-4Notice date : Tuesday, October 19, 2004Subject : Revision of certain penalty norms in respect of fines/penalties to be imposed in case of

irregularities observed during the course of inspectionSegment Name : General

The Disciplinary Action Committee (DAC) at its meeting held on September 21, 2004 had revised and approved certainpenalty norms for imposition of fines/penalties on members in respect of irregularities observed during the course ofinspection.

The statement indicating the nature of irregularities / violation and the consequential fines and penalties that wouldbe levied is enclosed for information of the members. Members may please note that these norms shall apply forviolations observed during the course of inspection conducted on or after the date of this notice.

It may be noted that the actions including the fines for violations are only indicative. In case of large number of instancesof violation including large number of funds / large quantities of securities or of a repetitive nature, the DAC may takesuch strict action as it may deem fit including levying of higher fines / suspension / expulsion.

In view of the above, members are requested to ensure compliance with the various Rules, Bye-laws and Regulationsof the Exchange and the provisions contained in the notices issued by the Exchange from time to time.

In case members require any clarification, they may please contact any of the following officials.

Sr.No. Name Extn.

1. Ms.S. Srividya 8404

2. Mr.Sandeep Gupta 8153

3. Ms.Parul Kothari 8196

4. Ms.Shaila Valsan 8316

Kevin Desouza Mayank MehtaCGM – Inspection & Membership AGM - Inspection

271

List of Violations with indicative fines.

Violation BSE Notice No. Fines

Cash dealing with clients Notice No.20030903-5 dated 3.9.2003. Few instances AdviceMultiple instances Rs.10,000/-

Non appointment of Compliance Officer Notice No.20021001-5 dated 1.10.2002. Rs.10,000/-

Execution of trades on own account Notice No.20031125-7 dated 25.11.2003 Few instances Advicewithout disclosing to the clients. Multiple instances

Rs.10,000/-

Execution of trades on own account Notice No.20030909-1dated 3.9.2003 Rs.10,000/-from locations other than those allowedby the Exchange

Transfer of trades executed for one Notice No.101502/2001dated Few instances Adviceclient to another client. October 12,2001.of the value of trades Multiple instances –0.02%

transferred or Rs.5,000/- ,whichever is higher.

Transfer of trades from Own account Notice No.101502/2001dated Few instances accountto client October 12, 2001 or vice-Multiple versa 0.02%

Rs.5,000/- instances of thevalue of trades transferredor Rs.10,000/- whichever ishigher.

Transfer of trades from Client account Notice No.101502/2001 dated Few instances Adviceto Own account. October 12, 2001 Multiple instances - 0.02%

of the vale of tradestransferred or Rs.10,000/-,whichever is higher.

Use of fictitious client codes during Notice No.101502/2001dated Few instances Rs.10,000/-order placement October 12, 2001. Multiple instances -0.02%

of the vale of tradestransferred or Rs.20,000/-whichever is higher.

272

Notice no : 20051102-5Notice date : Wednesday, November 02, 2005Subject : Revision of norms for imposition of late fees / fines / and penalties - Cash SegmentSegment Name : General

The Exchange has reviewed and rationalised the existing norms for imposing late fees, fines and penalties for theCash segment. The revised norms have been approved by the Disciplinary Action Committee (DAC) of the Exchangein its meeting held on October 20, 2005.

A consolidated list indicating the nature of irregularity/violation and the consequential late fees, fines and penaltiesthat would be levied is enclosed for the information of the Trading Members. The Trading Members may please notethat the consolidated list of revised norms shall be applied for the violations observed during the course of inspectionconducted on or after November 7, 2005.

It may be noted that the actions including fines for violations are only indicative. In case of a large number of instancesof a violation involving large amount of funds / large quantity of securities or instances of repetitive nature, the DACmay take such strict action as it may deem fit including levy of higher fines / suspension / expulsion.

The Trading Members are once again advised to ensure compliance with the various Rules, Byelaws & Regulations ofthe Exchange.

Trading Members require any clarification, they may please contact any of the following officials :

NAME INTERCOM NO.

Mr. Pankaj Gupta 8120

Ms. Shaila Valsan 8316

Ms. Parul Kothari 8196

Mr. Amita Tarwale 8262

P.K.Ramesh Pankaj GuptaDy. General Manager Asst. General ManagerSurveillance & Supervision Surveillance & Supervision

273

List of Violations alongwith indicative fines

Sr. Rule/Byelaw/ Regulation/Notice no. Up to 3 MultipleViolation

No. instances instances

I List of Violations with indicative fines for routine inspection.

Contract Notes

1 Non-issue of Bye law 219 & Exchange Notice No. Rs. 5,000* Rs.10,000*contract notes. 5116/93 dated November 11, 1993.

2 Contract Note not as Regulation 14.2/Exchange notice No. Advice Rs. 5,000per the formate 20021109-9 dated November 9, 2003.prescribed bythe Exchange

3 Board Resolution/Power Exchange notice no. 1024/98 dated Advice Adviceof Attorney for signing March 20, 1998.of Contract Notes notsubmitted to the Exchange

4 Contract notes not issued Bye law 247 A/Exchange Notice No. Advice Rs. 10,000*within 24 hours of trade 4914/96 dated August 13, 1996execution or duplicatesof the contract notesissued not acknowled-ged by clients/ no proofof delivery.

5 Duplicates of the contract Exchange notice no. 4850/97 dated Advice Warningnotes issued not December 10, 1997. maintained Counter foilsmaintained having noadequate details.

6 Details of the trade have Notice no.4646/97dated November Advice Warningnot been attached 29, 1997as an Annexure to thecontract note (original /duplicate) issued in caseof consolidated tradeshown in contract note.

7 Instances of brokerage Regulation 14.1 The Member to be advised to refundcharged at a rate higher the excess brokerage charged tothan the permissible the maximum. constituents and a fine

of an equivalent amount or Rs 5000/-,whichever is higher, belevied on theMember.

8 Non-charging of brokerage Advice Reprimand/to the clients Warning

9 Execution of transactions Byelaw 45, 49 & 50. Refer the matter to DACin securities not listed/notpermitted on the Exchange.

10 Difference in rate Notice No. 5116/93 Excess amount to be returned to thementioned in the dated November 11, 1993. client to twice the excess amountcontract note and the charged executed rate.or Rs 25,000/-

whichever is higher, to be levied on themember.

274

Client Codes

11 Transfer of trades executed Notice no. 101502/2001 dated Advice 0.02% of thefor one client to another October 12, 2001. value of tradesclient. transferred or

Rs.5,000whicheveris higher

12 Transfer of trades from Notice no. 101502/2001 dated Rs.5,000 0.02% of theOwn account to client October 12, 2001. valueof tradesaccount or vice-versa transferred or

Rs.10,000whichever ishigher

13 Evasion of margin by Notice no. 101502/2001 Rs.5,000# Rs.10,000#entering wrong client dated October 12, 2001.code in the system.

14 Use of fictitious client Notice no. 20041019-4 Rs.10,000 0.02% of thecodes during order dated October 19, 2004 value of tradesplacement. transferred or

Rs.20,000whicheveris higher

15 Execution of Trades on Notice no. 20041019-4 Advice Rs.10,000**account without dated October 19, 2004disclosing to the clients.

16 Execution of Trades on Notice no. 20041019-4 Rs.10,000own account from dated October 19, 2004locations other than thoseallowed by the Exchange.

17 Institutional trades not DNPD/Cir-22/04 dated April 1, 2004 Advice Rs.10,000*routed through STPsystem

18 Not using the prescribed Advice Rs.10,000*identification codes fortransaction routed throughSTP system

Spot Transaction

19 Not taken written consent Byelaw 199/ Exchange Rs.5,000# Rs.10,000#from the client for Notice No. 4914/96principal to principal dated August 13, 1996.transactions.

20 Contract Notes not issued / Reg. 14/ Exchange Notice No. 4914/96 Rs.5,000* Rs.10,000*not in prescribed dated August 13, 1996Form ‘B’ for principal toprincipal transactions.

21 Transactions done on a SEBI Circular no. SMD/RCG/CIR/(BKG)/ Rs.5,000# Rs.10,000#spot basis are not at all 293/95 dated March 14, 1995.reported to the Exchange.

Sr. Rule/Byelaw/ Regulation/Notice no. Up to 3 MultipleViolation

No. instances instances

275

22 Transactions done on a SEBI Circular no. SMD/RCG/CIR/(BKG)/ Advice Rs.5,000#spot basis are not reported 293/95 dated March 14, 1995.to the Exchange within theprescribed time limit.

23 Transactions done on Section 2(i) of the SCRA,1956. 1% of the 2% of thea spot basis are not transaction transactionsettled within the value or value orprescribed time limit. Rs.5,000/- Rs.10,000/-

whichever whicheveris higher. is higher.

Books of accounts & other documents

24 Not maintained Reg. 17(1) of the SEBI (Stock Brokers 10,000/-& Sub Brokers) Rules, 1992.

Not maintained properly 5,000/- per office

Not made available for Reprimandverification when asked for.

Not maintained for branch / 10,000/- per officesub broker

Not maintained properly 5,000/- per officefor branch / sub-broker

Not made available for Reprimandbranch /sub-broker whenasked for.

25 Segregationof Exchange Rs.10,000wise /Segment wise clientledgers not maintained.

26 Non-maintenance of Advicevouchers (entries beingdirectly posted to ledger)Reprimand/ Warning

27 Non-maintenance of up to Advice Reprimand/date bank reconciliation Warningstatements

28 Incomplete/Non-maintena- Exchange notice no. Rs.5,000 Rs.5,000nce of registers (Register 4850/97 dated 10.12.1997. per register office per register officeof Securities / Registerof Transactions /Register of Complaints /Dividend ledger / MarginDeposit Book)

29 Non-availability of Advice Reprimand/prescribed Warninginformation in Registers

Dealing with clients

30 Client’s funds not routed Bye law 247A/Exchange Rs.25,000through designated notice nos. 7031/94‘Client Account’/ dated 6.12.1994 & 4850/97Non maintainance of dated 10.12.1997.Client account.

Sr. Rule/Byelaw/ Regulation/Notice no. Up to 3 MultipleViolation

No. instances instances

276

- Non-segregation of own Reprimand 10,000and client transactions inseparate bank accounts

- Use of Clients account Reprimand 10,000for non specified purpose

- Use of clients’ funds for Rs.50,000 Rs.1,00,000own purposes / Misuse of (up to 3 (for multipleclients’ funds/Unauthorised transactions) transactions)transfer of funds from oneclient’s account to anotherclient’s account.

- Delay in payments of Advice Rs.5,000funds to the clients. (In case of

inordinate delaysof more than1 week,double thefine amount to becollected.)

-Non-payment or delay inpayment of dividendamounts to constituents / Advice Rs. 5,000non-reconciliation ofdividend account

31 - Securities due to the Reprimand Rs. 5,000clients transferred tothe members’ beneficiaryaccount.

- Securities due to one Rs.50,000 Rs.1,00,000client transferred to (up to 3 (for multipleanother client OR transactions) transactions)Securities due to theclients used for meeting thepay-in obligation of themember/ other client.

- Delay in delivery of Advice Rs. 5,000securities to clients. (In case of

inordinatedelays of morethan 1 week,double the fineamount be levied.)

32 Non-segregation of clients Rs.10,000** Rs. 25,000**securities into separatebeneficiary dema account /Non-maintenance constituentsbeneficiary demat accountfor keeping client securities

33 Use of constituents Warning Rs.10,000benefici ary demataccount for purposes otherthan specified

Sr. Rule/Byelaw/ Regulation/Notice no. Up to 3 MultipleViolation

No. instances instances

277

34 Transaction with clients Notice no. 20041019-4 Advice Rs.10,000in cash. dated October 19, 2004

35 Deliver/Receive securities Notice no. 5 dated September 3, 2003. Advice Rs. 5,000other than from respectiveClients BeneficiaryAccount.or under approvedscheme.

36 Half yearly statement of Notice no. 9 dated January 14, 2003. Rs.5,000** Rs.10,000**accounts for funds/securities not sent to theclients.

Client Registration

37 - Non execution of Client Exchange Notice No.1798/97 Advice Rs.10,000**Registration Form or dated April 24, 1997 & SEBI Circularmaintaining incomplete SEBI/MIRSD/DPS-1/Cir-31/2004 datedclient database. August 26, 2004

- Non execution of member- Advice Rs.10,000**client agreement /TripartiteAgreement or agreementnot in prescribed format.

38 Non-issue of Risk SEBI Circular SEBI/MIRSD/ Warning Rs.10,000**Disclosure Document or DPS-1/Cir-31/2004not in prescribed format dated August 26, 2004

39 Not assigned unique Notice no. 20030115-5 Rs.5000 Rs.10,000client codes and / or not dated January 15, 2003mapping the client codewith PAN/ Passport etc.in the back office, and/ornot registering the clientdetails on BOLT

Dealing with Intermediaries

40 Dealing with un-registered Notice no.623111/2000 Rs. 25,000 per un-dated September 18,1999. registered

Sub broker.

41 Inspection of books of SEBI Circular No. SMD/ Reprimand/ Rs.10,000registered Sub-brokers POLICY/CIR-4/2003 Warningnot done dated February 11, 2003

42 Members of other Notice no. 54809/2000 Advice the member to comply withExchanges routing orders dated July 1, 2000 registration requirement within oneof their clients through BOLT, month. If not complied, fine of Rs.without being registered 25,000/- per unregistered sub-brokeras Sub-brokers with SEBI. to be imposed.

43 Sharing Commission/ Bye law 218/ Exchange Rs.5,000 Rs.10,000brokerage without notice no. 2628/97 dated 9.6.1997.registering such personsas Remisiers/ sub-brokerwith the Exchange.

Sr. Rule/Byelaw/ Regulation/Notice no. Up to 3 MultipleViolation

No. instances instances

278

44 Sharing of brokerage Byelaw 218with

-another member 5 ,000/- 10,000/-

-an employee of another 10,000/- 20,000/-member or a person foror with whom tradingmembers are forbiddento do business.

45 Allotting BOLT TWSs Notice no. 104616/2001 Rs.15,000 per instanceto another member of dated November 12, 2001. and de-activation of thethe Exchange. said BOLT TWS

46 Usage & operation of a Exchange Notice No. 104616/2001 Advice Rs.10,000trading terminal dated November 12, 2001.by a unauthorised person

47 Trading terminals provided Rs.20,000 per terminal for the firstto unregistered five terminals and the fine amountintermediaries/ be stepped up by Rs. 5,000 perunauthorised extension terminal in successive batches ofof trading network/ non five terminals each thereafter.submission of requireddetails of IML terminals tothe Exchange

48 Executing trades for Rs.10,000 Rs.25,000another member of theExchange.

49 Dealing with one member SEBI/MIRSD/Cir-06/2004 Warning Rs.10,000broker/ subbroker of dated January 13, 2004another exchange forproprietary trading withoutintimating the name ofsuch member broker/sub-broker to the Exchange

50 Dealing with more than one Rs. 10,000 for every additionalmember broker/sub-broker member broker/ sub-brokerof another exchange forproprietary trading

51 Done business on Bye- Law 358 (vi) Rs.10,000 Rs.25,000behalf of suspended /defaulter / expelledmembers withoutobtaining prior permissionof the Exchange.

Margins

52 Non submission/late Notice no. 5 dated September 18, 2003 Fine of Rs.100 per day till the datesubmission of of submission.ComplianceCertificate

Sr. Rule/Byelaw/ Regulation/Notice no. Up to 3 MultipleViolation

No. instances instances

279

regarding collection ofup-front margin fromnon-institutional clients.

53 Non collection / short Notice no. 123621/2002 May 21, 2002. Rs. 5,000 Refer the mattercollection of a margin to DAC.from non-institutionalclients on their respectivenet open positions by themember sub-broker.

54 Non collection of Notice no.84618/2001dated April 26, 2001. Rs. 5,000 Refer the mattercompliance certificate to DAC.from sub-broker’s)regarding collection ofmargin from non-institutionalclients on their respectivenet open positions.

55 Submission of wrong Notice no. 123621/2002 May 21, 2002. Rs.5,000 Refer the mattercompliance certificate to DAC.regarding collection ofup-front margin from non-institutional clients.

Others

56 Non receipt of reply seeking Advice Rs.5,000/-clarification on inspection.

57 Delay / Non- submission of The Compliance Certificate should beCompliance Certificate submitted within 30days/prescribedregarding implementation time of the date of receipt of theletterof suggestions made at the communicating the observations failingtime of inspection which, a fine of Rs.5,000/- may be

imposed.

58 Delay / Non submission ofAudit Report AuditedAccounts and NetworthCertificate.

Note : Submission of Notice No. 7 dated July 10, 2003. Non-submission of documents by dueincorrect, unaudited or date : Fine of Rs. 100/- per day tillnot in a prescribed format the date of submission of thewill be treated as non- documents.submission of the same.

Non-submission of documents aftertwo months of due date: Fine of Rs.500/- per day after two months of duedate until submission of thedocuments.

59 Non-attendance of DAC To be referred to DACmeetings without priorintimation.

60 Involved in Fund Based SMD/POLICY/CIR-6/97 dated May 7, 1997. Advice Rs.20,000activities

Sr. Rule/Byelaw/ Regulation/Notice no. Up to 3 MultipleViolation

No. instances instances

280

Sr. Rule/Byelaw/ Regulation/Notice no. Up to 3 MultipleViolation

No. instances instances

61 Non appointment of Notice no. 20041019-4 Rs.10,000Compliance Officer dated October 19, 2004

62 Non-display of SEBI Rs.10,000 Rs.20,000Registration Certificate

63 Commencement of Internet SMDRP/POLICY/CIR- 06/2000 Rs.10,000Trading without prior dated January 31, 2000approval of the Exchange

Margin Trading

64 - Providing margin trading SEBI Circular Nos. SEBI/MRD/SE/SU Rs.1,00,000facility to clients without /Cir- 15/04 dated March 19,2004 andobtaining prior permission SEBI/MRD/SE/SU/Cir- 16/04 datedof the Exchange March 31, 2004 and Exchange Notice

No. 20040402-31 dated April 2, 2004

65 Non-execution of agreement Warning Rs.10,000for providing margintradingfacility or agreement not inprescribed format

66 - Non-obtainment of Warning Rs.5,000declaration from clients,giving details of margintrading facility availed fromany broker in anyexchange/ rejection of theclient’s request for margintrading with any broker / etc.

67 - Non-maintenance of Rs.5,000 Rs.10,000separate demat account forevery client for holdingclient wise securitiespurchased under margintrading facility

68 - Not enabling the client to Advice Rs.5,000observe the movement ofsecurities from his / herdemat account throughinternet

69 - Non-maintenance of Rs. 5,000 N.A.separate record of details(including the sources ) offunds used for the purposeof margin trading

70 - Providing margin trading Rs.50,000 Rs.1,00,000facility using funds otherthan own funds and / orborrowings from scheduledcommercial banks andNBFC’s regulated by RBI

281

Sr. Rule/Byelaw/ Regulation/Notice no. Up to 3 MultipleViolation

No. instances instances

71 - The total indebtednessof the trade member.

79 Dealing in securities in 0.01% of the value of trades doneOWN account. in its own account subject to a

minimum of Rs.5,000 and a maximumof Rs. 25,000

80 Non-appointment of CEO Matter to be referred to SEBI

81 Governing Board of theTrading Member not havingthe prescribed composition

82 Staff memebrs of theTrading Member notsegregated from thefunctions of the parentstock exchange

282

II Post Compliance Inspection

1 Submitting wrong Compliance Certificate Rs. 15,000regarding implementation of suggestionsmade at the time of inspection

2 In respect of repeated violationsobserved in both the last normalinspection and the post complianceinspection

- where the penalty was levied Twice the amount of penaltylevied under routineinspection

- Where the Member was issued warning Fines levied for multipleor was reprimanded instances under routine

inspection

Note :

1 Inspection of books of registered Sub-brokers to be done - 20% per year

2 All the requisite records, if available / maintained by members in electronic form, shall be considered as compliance.

3 * Based on number of contract notes

** Based on number of clients

# Based on number of trades

## And to raise the shareholding to the prescribed level.

283

Notice no : 20080211-19Notice date : Monday, February 11, 2008Subject : Client Margin InformationSegment Name : General

CONTENTS :

To

Member brokers

The member brokers of the Exchange are hereby informed that at present reports are being downloaded to memberbrokers on a daily basis, which give the client-wise details of VaR, ELM and Mark To Market margins levied by theExchange.

As per the directions of SEBI, the member brokers are now advised to inform their clients about the margins levied ontheir traded positions on a day-to-day basis by way of either sending the margin information through email or alongwith the physical contract notes. The member brokers are also advised to include the following information in thestatements being provided to their Clients:

l Total collateral deposits placed by the client upto day T-1 (with break-up in terms of cash, FDRs, BGs and securities)

l Collateral deposits utilised towards margins upto the end of T-1

l Collateral deposits placed by the client on day T (with break-up in terms of cash, FDRs, BGs and securities)

l Margin adjustments for T day

l Collateral status (balance with the member / due from the client) at the end of T day

The member brokers are required to comply with the said requirements with effect from February 18, 2008.

For any clarifications member brokers may contact the following Exchange officials:

Mr.Mitesh Thakkar and Mr. Nitesh Agarwal

Phone Nos.- 22721233/34 Ext - 8879/8354

P K Ramesh Yogesh BambardekarGeneral Manager ManagerSurveillance and Supervision Surveillance and Supervision

284

Notice No : 20060221-12Date : 21/02/2006Subject : Penalty Norms for Inspection of books of accounts and other Documents - Cash SegmentDept Name : InspectionSegment Name : Equity

With a view to ensure better compliance from the trading members and to complete the inspection process smoothlythe Exchange, has decided to impose penalty for non submission of required details/ documents/ records for inspectionpurposes by the members, within the prescribed time.

The penalty structure in respect of the above is as under: -

Sr. No. Particulars Fines/ Penalties.

1. Non-Submission of the Inspection Questionnaire duly filled in by Rs. 500/- per day from the expirythe member within the specified time, as mentioned in the letter of the specified time till theaddressed to the member whose inspection is ordered. questionnaire is submitted.

2. The member Submitting Inspection Questionnaire with incorrect Rs. 5,000/-or incomplete information.

3. Not making available the documents / records for inspection Rs. 500/- per day from thepurposes within the prescribed time without proper justification. expiry of the specified time till the

records / documents are submitted.

Trading members are advised to take note of the above.

In case the Trading Members require any clarification, they may please contact any of the following officials: -

NAME INTERCOM NO.

Ms Parul Kothari 8196

Ms Shaila Valsan 8316

Ms Amita Tarwale 8262

Sanjiv Kapur Pankaj GuptaGeneral Manager Asst.General ManagerSurveillance & Supervision Surveillance & Supervision

285

Notice no : 20051102-6Notice date : Wednesday, November 02, 2005Subject : Introduction of norms for imposition of late fees / fines/ and penalties – WDM / RDM /

Corporate Debt SegmentSegment Name : General

The Exchange introduced its wholesale debt segment (WDM) for reporting of trades in government securities, in June2001 (Exchange Notice No.74133/2001 dated January 11, 2001). A Retail Debt Segment (RDM) for executingtransactions in government securities through the Order Matching mechanism was introduced in January 2003(Exchange Notice No.20030114-17 dated January 14, 2003). The Exchange also streamlined the procedures forreporting of Spot Market Deals and for execution of Specific Bargains in Corporate Debt Securities in August 2003(Exchange Notice No.20030806-3 dated August 6, 2003).

The Exchange has laid down prudential norms for carrying out inspection of the Books and Accounts of the TradingMembers in the WDM / RDM segments and also the deals reported in the Corporate Debt segment.

The Exchange has now devised norms for imposing late fees, fines and penalties for the WDM/RDM/Corporate Debtsegment. The norms have been approved by the Disciplinary Action Committee (DAC) of the Exchange in its meetingheld on October 20, 2005.

Statement indicating the nature of irregularity/violation and the consequential late fees, fines and penalties that wouldbe levied is enclosed for the information of the Trading Members. The Trading Members may please note that thesenorms shall be applied for the violations observed during the course of inspection conducted on or after November 7,2005.

It may be noted that the actions including fines for violations are only indicative. In case of a large number of instancesof a violation involving large amount of funds / large quantity of securities or instances of repetitive nature, the DACmay take such strict action as it may deem fit including levy of higher fines / suspension / expulsion.

The Trading Members are once again advised to ensure compliance with the various Rules, Byelaws & Regulations ofthe Exchange.

In case the Trading Members require any clarification, they may please contact any of the following officials :

NAME INTERCOM NO.

Mr. Pankaj Gupta 8120

Ms. Shaila Valsan 8316

Ms. Parul Kothari 8196

Mr. Amita Tarwale 8262

P. K. Ramesh Pankaj GuptaDy. General Manager Asst. General ManagerSurveillance & Supervision Surveillance & Supervision

286

Wholesale Debt Market Segment, RDM & Spot Deals in Corporate Debt

Sr. Violation Rule/Byelaw/ Up to 3 MultipleNo. Regulation/Notice no. instances instances

I List of violations alongwith indicative fines

WDM / RDM

1 WDM trades not settled on T+1 Exchange Notice no. 20050520-8 Rs.5,000 Rs.10,000(effective from May dated May 20, 2005 24, 2005)

2 WDM prices quoted on a cum- Exchange Notice No. 74133/2001 Advice Warninginterest basis (Dirty price) dated January 11, 2001

3 Non-maintainance of the prescribed Exchange Notice No. 74133/2001 WarningNet-worth level in WDM/RDM dated January 11, 2001 &

20030114-17 datedJanuary 14, 2003

4 Issue of contact notes in WDM Exchange Notice No. 74133/2001 Rs.5,000* Rs.10,000*without reporting to the Exchange dated January 11, 2001

5 Difference in rate mentioned in the Notice No. 5116/93 datedcontract note and the confirmation November 11, 1993.slip. Advice Reprimand

Specific Bargains

6 Execution of transactions in Byelaw 45, 49 & 50. Rs.10,000 Rs.25,000securities not listed/not permitted Exchange Notice No. 20030806-3on the Exchange without taking dated August 6, 2003permission for specific bargains

7 Issue of contract notes in the case Exchange Notice No. 20030806-3 Advice Warningof specific bargains prior to dated August 6, 2003obtaining written permissionfrom the Exchange

Spot Transaction

8 Not taken written consent from the Byelaw 199/ Exchange Rs.5,000 Rs.10,000client for principal to Notice No. 4914/96

dated August principal transactions. 13,1996.

9 Contract Notes not issued / not in Reg. 14/ Exchange Rs.5,000 Rs.10,000prescribed Form ‘B’ for principal to Notice No. 4914/96principal transactions. dated August 13,1996

10 Transactions done on a spot basis SEBI Circular no. SMD/RCG/CIR/ Rs.10,000 Refer matterare not at all reported to the (BKG)/293/95 dated March to DACExchange. 14,1995.

11 Transactions done on a spot basis SEBI Circular no. SMD/RCG/CIR/ Rs.5,000 Rs.10,000are not reported to the Exchange (BKG)/293/95 dated March 14, 1995.within the prescribed time limit.

12 Transactions done on a spot basis Section 2(i) of the SCRA, 1956. Rs.5,000 Rs.10,000are not settled within the prescribedtime limit.

287

Contract Notes

13 Non-issue of contract notes. Bye law 219 & Rs.5,000* Rs.10,000*Exchange Notice No.5116/93dated November 11, 1993.

14 Contract Note not as per the format Exchange Notice Advice Rs.5,000prescribed by the Exchange dated February 20, 2001

15 Board Resolution / Power of Exchange notice no.1024/98 Advice Rs. 5,000Attorney for signing of Contract Notes dated March 20, 1998.not submitted to the Exchange

16 Contract notes not issued within 24 Bye law 247 A/ Advice Rs.10,000*hours of trade execution or Exchange Notice No.4914/96duplicates of the contract notes dated August 13, 1996issued not acknowledged by clients/ no proof of delivery.

17 Duplicates of the contract notes Exchange notice no. 4850/97 Advice Warningissued not maintained. Counter dated December 10, 1997.foils maintained having no adequatedetails.

18 Instances of brokerage charged Regulation 14.1 The Member to be advised toat a rate higher than the refund the excess brokeragepermissible maximum. charged to the constituents and a

fine of an equivalentamount orRs 5000/-, whichever is higher,be levied on the Member.

Books of accounts & other documents

19 - Not maintained Reg. 17(1) of the SEBI (Stock 10,000/-- Not maintained properly Brokers & Sub Brokers) 5,000/-- Not made available Rules, 1992.for verification when asked for. Rs.10,000

20 Segregation of Exchange wise / Rs.10,000Segment wise client edgers notmaintained.

21 Incomplete / Non-maintenance of Exchange notice no. 4850/97 Advice ReprimandRegister of Complaints dated 10.12.1997.

Dealing with clients

22 Securities due to the clients Bye law 247A/ Reprimand Rs.5,000transferred to the members’ Exchange notice nos. 7031/94beneficiary account. dated 6.12.1994 & 4850/97

dated 10.12.1997.

23 Transaction with Notice no. 20041019-4 Advice Rs.10,000clients in cash. dated October 19, 2004

Client Registration

24 - Non execution of Client Notice no. 1798/97 Advice Rs.10,000**Registration Form or maintaining dated April 24, 1997incomplete client database.

Sr. Violation Rule/Byelaw/ Up to 3 MultipleNo. Regulation/Notice no. instances instances

288

- Non execution of member-clientagreement or agreement not inprescribed format. Advice Rs.10,000**

Dealing with Intermediaries

25 Sharing of brokerage with Byelaw 218 5,000/- 10,000/-

-another member

-an employee of another member 10,000/- 20,000/-or a person for or with whomtrading members are forbidden todo business.

26 Allotting BOLT TWSs to another Notice no. 104616/2001 Rs.15,000 per instance andmember of the Exchange. dated November 12, 2001. de-activation of thesaid BOLT TWS

27 Usage & operation of a trading Exchange Notice No. 104616/2001 Advice Rs. 10,000terminal by a person (an employee dated November 12, 2001.of the trading member) other thanan approved user.

28 Trading terminals provided to Exchange Notice No.104616/2001 Rs. 20,000 per terminal for theunregistered intermediaries/ dated November 12, 2001. first five terminals and the fineunauthorised extension of trading amount be stepped up bynetwork/ non submission ofrequired Rs. 5,000 per terminal indetails of IML terminals to the successive batches of fiveExchange terminals each thereafter.

Others

29 Non receipt of reply seeking Advice Rs.5,000/-clarification on inspection.

30 Delay in submitting the Compliance The Compliance of the InspectionCertificate regarding implementation Report observations should beof suggestions made at the time submitted within 30 days /of inspection prescribed time of the date of

receipt of the letter communicatingthe observations failing which, afine of Rs.5,000/- may beimposed.

Sr. Violation Rule/Byelaw/ Up to 3 MultipleNo. Regulation/Notice no. instances instances

289

II Post Compliance Inspection

1 Submitting wrong Compliance Rs.15,000Certificate regarding implementation ofsuggestions made at the time of inspection

2 In respect of repeated violationsobserved in both the last normalinspection and the post complianceinspection

- where the penalty was levied Twice the amount of penalty levied under routine inspection

- Where the Member was issued Fines levied for multiplewarning or was reprimanded instances under routine

inspection

Note :

1 All the requisite records, if available / maintained by members in electronic form, shall be considered ascompliance.

2 * Based on number of contract notes

** Based on number of clients

290

Notice No : 20060331-6Notice date : Friday, March 31, 2006Subject : Penalty structure for non-registration of client codes by the stipulated timeSegment Name : General

SEBI vide its Letter No. SMDRP/Policy/CIR-39/2001 dated July 18, 2001 has made it mandatory for brokers to useunique client codes for all their clients. Further, all brokers are required to furnish particulars of their clients to theStock Exchanges in respect of all clients having order value of Rs. 1 lakh and above.

SEBI vide its letter dated December 30, 2002 has clarified that consequent to the above directives, w.e.f. January 1,2003 no member shall be allowed to execute any order having value of Rs. 1 lakh or more for any client without obtainingthe requisite details from the client. SEBI vide this letter further directed the Exchanges to promptly deactivate thetrading terminals of the trading members who do not implement the provisions of Unique Client Code w.e.f. January 1,2003.

SEBI vide its Circular No. SEBI/MRD/SE/Cir-34 /2003/29/09 dated September 29, 2003 decided to call for the requisiteclient details from the brokers on a monthly basis. As per the SEBI Circular, such information for a specific monthshould reach the Exchange within 7 working days of the following month.

Attention of trading members is also drawn to Exchange Notice No. 20040609-24 dated June 09, 2004 whereby tradingmembers were informed that with effect from June 11, 2004 all client codes punched for order value of Rs. 1 lakh andabove on any day, need to be registered strictly by the next working day.

Currently, the Exchange provides members with a daily report on unregistered client codes in respect of all client codespunched but not registered by the member, for order value of Rs. 1 lakh and above. In addition, the Exchange alsoprovides members with reports on the total unregistered codes for a month on 3 occasions in the next month, namelyon the 2nd, 5th and 7th working day of the next month. This is being done in order to enable members to register clientcode details with the Exchange before the stipulated time towards compliance of SEBI and Exchange requirements.

In order to ensure timely registration of client codes, a penalty scheme is being ntroduced from April 2006 for non-registration of client codes by the stipulated time. The penalty structure would be as follows –

Sr. No. * No. of unregistered codes Fine ( Rs. )for a month

1 1 to 5 NIL

2 6 to 20 2000/-

3 21 to 50 5000/-

4 More than 50 10000/- and BOLT Terminals to bedeactivated for a single day

• Wrongly punched client codes as intimated by the member are reduced from the total number of unregisteredcodes to arrive at the final count of unregistered client codes.

The penalty levied for a particular month will be debited through the General Charges bill of the member pertaining tothe succeeding month. To clarify, penalty for not registering the client codes for April 2006 by the stipulated time i.e.the 7th working day of May 2006 will be debited through the General charges bill pertaining to May 2006.

After imposition of the fine, the member will have to either register the client codes or in case the codes were wronglypunched, the member would be required to submit details in the prescribed format, within 5 working days of the stipulatedtime for registration of the client codes. In case a member fails to do so, his BOLT terminal would be liable for deactivation/ continue to remain deactivated till this is done.

291

The above penalty structure would be implemented from the month of April 2006. Consequently, all client codes punchedfor order-value of Rs.1 lakh and above from April 1, 2006 and which have not been registered by the trading memberwith the Exchange before the stipulated date, will attract the penalty as given above. Trading members are advised intheir own interest to strictly ensure registration of all client codes by the stipulated time.

For any assistance / clarification in the matter, trading members may contact the following officials on Tel. Nos. 022 -22721233 / 34:

Trading members may also seek assistance from their respective Relationship Managers in the Member Services andDevelopment department in this respect.

P. K. Ramesh Mukesh KuwadDy. General Manager Dy. ManagerSurveillance and Supervision Surveillance and Supervision

SR.NO. NAME INTERCOM NO.

1 Mr. Mukesh Kuwad 8497

2 Mr. Sanjay Pardiwala 8252(For system-related queries only)

3 Mr. K. Mohanan 8416(For Client registration issues)

INDEXSR. NO. TOPIC PAGE NO.

1. Introduction 1

2. Inspection Mechanism 2

3. Maintenance of Books of Accounts, Records and Documents 3

4. Dealing with Clients 11

5. Mode of Payment & Delivery 15

6. Compliance Officer 16

7. Unique Client Code (UCC) 17

8. Permanent Account Number (PAN) 18

9. Trading Terminals (BOLT / IML) 19

10. Pro-Account Trading 20

11. Brokerage 21

12. Statement of account for Funds & Securities 22

13. Collection of Margins from Clients 23

14. Client Margin Information (Margin reporting to the clients) 24

15. Principal to Principal Transactions 25

16. Margin Trading 26

17. Client Funding 27

18. System Audit 28

19. Trading through another member 29

20. Sub-brokers 30

21. Remisier 32

22. Display of SEBI Registration Certificate & Notice Board 33

23. Anti Money Laundering Provisions 34

24. Specific Bargains 35

25. Bulk Deals 36

26. Block Deals 37

27. Straight Through Processing (STP) 38

28. Transactions in scrips where FII limit has been reached 39

29. Advertisement 40

30. Involvement in any other business / any other capacity 41

31. Audited Accounts & Networth Certificate 42

32. Compliance with Regulatory Directives 43

33. Code of conduct for members 44

34. Penalty Norms 46

35. Index of Relevant Rules/Bye-laws/Regulations/Notices 50

36. Relevant Rules/Bye-laws/Regulations/Notices 56-291

The Exchange has been conducting inspection of the trading members on a regular basis. During the course ofinspection of the books and accounts, records and documents of the trading members, the Exchange has observedcertain common irregularities / deficiencies.

This Compliance Manual is prepared in order to help the trading members to take note of the statutory compliancerequirements so that such irregularities / deficiencies can be avoided.

In case of any clarifications, the trading members may contact the following officials of the Exchange at Telephone no22721233/34.

Sr. No. Name of the Official Extn. No.

1. Ms. Parul Kothari 8196

2. Ms. Shaila Valson 8316

P. K. Ramesh Mitesh ThakkarGeneral Manager ManagerSurveillance & Supervision Surveillance & Supervision