Appending herein SEBI Notification S.O. No. 1600 (E) dated 25.09.2006, Circular No. MIRSD/DR-1/FC/Cir-15/2006 dated 29.09.2006 and Letter No.MIRSD/DR-1/FC/78011/2006 dated 03.10.2006 regarding the captioned subject.

Members are advised to take note of the same and be guided / comply accordingly.

The Exchange shall recover / collect SEBI fees from Members in each Clearing.

FOR THE U.P.STOCK EXCHANGE ASSN.LTD.

(K.D.GUPTA)

ADMINISTRATOR

THE GAZETTE OF INDIA

EXTRAORDINARY

PART –II – SECTION 3 – SUB SECTION (ii)

PUBLISHED BY AUTHORITY

SECURITIES AND EXCHANGE BOARD OF INDIA

NOTIFICATION

Mumbai, the 25th September, 2006

SECURITIES AND EXCHANGE BOARD OF INDIA

(STOCK BROKERS AND SUB-BROKERS) (THIRD AMENDMENT)

REGULATIONS, 2006

S.O No. 1600 (E). In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board herebymakes the following Regulations to further amend the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992, namely :-

1. These Regulations may be called the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) (Third Amendment) Regulations, 2006.

2. They shall come into force on the first day of October, 2006.

3. In the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 -

(i) in regulation 10, in sub-regulation (1), for the word and figures

“Schedule III”, the words and figures “Schedule III or Schedule III-A, as the case may be” shall be substituted;

(ii) in Schedule III, after clause III, the following clause shall be inserted, namely:

“IV. Non-applicability to stock brokers governed by Schedule III-A

The provisions of this Schedule shall not apply to stock brokers to whom Schedule III-A applies, from the time when it becomes so applicable.”

(iii) after Schedule III, the following Schedule shall be inserted, namely:

“Schedule III-A

PAYMENT OF FEES BY STOCK BROKERS

[Regulation 10(1)]

Part A - Applicability

1. This schedule shall apply to stock brokers from the following points of time:

(a) All stock brokers who are granted registration by the Board on or after the first day of October, 2006 – upon grant of such registration;

(b) All stock brokers who were granted registration by the Board on or after the first day of April, 2006, but before the first day of October, 2006 – from the first day of October, 2006;

(c) All stock brokers who have not completed five financial years from the date of grant of registration by the Board, as on the thirty first day of March, 2006 – upon completion of ten financial years from the date of grant of registration by the Board;

(d) All stock brokers who have completed five financial years from the date of grant of registration by the Board, as on the thirty first day of March, 2006 – upon completion of the current block of five financial years, within the meaning of item I(1)(c) of Schedule III;

(e) All stock brokers falling under sub-clauses (c) or (d), who opt in accordance with clause 2 to be governed by the provisions of this Schedule – from such date as may be specified by the Board.

2. Stock brokers falling under sub-clauses (c) or (d) of clause 1 may opt to pay fees in accordance with this Schedule before completion of the relevant time periods mentioned in those sub-clauses, by exercising an option in writing to that effect and communicating it to the Board, in such manner and within such time as may be specified by the Board.

Part B – Charge of fees

3. On and from the applicability of this Schedule, every stock broker shall pay to the Board in accordance with Part C, a fee in respect of the securities transactions including off-market transactions undertaken by them, at the rates mentioned below:

Sl.No.          Nature of the securities transaction                                                   Rate of fee

a.        All sale and purchase transactions in securities other than debt securities.    0.0002 per cent. of the         price at which the securities arepurchased or sold (Rs.20/- per crore)

b. All sale and purchase transactions in debt securities.                                          0.00005 per cent. of the price at which the securities are purchased or sold (Rs.5/- per crore)

4. Nothing in clause 3 shall affect the liability of any stock broker to pay fees under Schedule III, which accrued before this Schedule became applicable to him and  such fees shall be paid as per the relevant provisions of Schedule III as if they had not ceased to be applicable to him.

Part C – Manner of payment and recovery

5. (1) Every recognised stock exchange shall collect from every stock broker to whom this Schedule applies, the fee payable under clause 3 in respect of -

(a) securities transactions entered into by him in that stock exchange; and

(b) off-market transactions entered into by him which are reported to that stock exchange – in accordance with the provisions of its bye-laws.

Explanation: The Board may specify the manner in which fees shall be collected from stock brokers who report the same transactions to different stock exchanges in which they are members, under clause (b).

(2) The fee collected by a recognised stock exchange under sub-clause (1) during a calendar month shall be paid by the stock exchange to the Board by the fifth working day of the following calendar month.

(3) All recognised stock exchanges shall maintain such registers and furnish such returns or information to the Board in respect of the fee collected under this Schedule, as may be specified by the Board.

(4) Without prejudice to sub-clause (3), a recognised stock exchange shall also be liable to furnish such information or explanations to the Board as may be required by it in respect of fee collected or liable to be collected under this Schedule.

6. (1) Nothing contained in clause 5 shall affect the primary liability of a stock broker to pay the fees under clause 3 or shall preclude the Board from recovering any such fee remaining unpaid by any stock broker directly from him.

(2) Where due to the stock broker’s default any fee which was liable to be paid on his behalf under clause 5 remains unpaid or is paid belatedly, he shall, without prejudice to any other action that may be taken under the Act, rules or regulations, pay an interest of 15 per cent. per annum for every month of delay or part thereof to the Board.

(3) Every stock broker shall be liable to furnish such information or explanations to the Board as may be required by it in respect of fee paid or payable under this Schedule.”

(iv) in Schedule IV –

(a) in clause 1, for the letters and figures “Rs.25,000/-“ the letters and figures “Rs.50,000/-“ shall be substituted;

(b) for clause 2, the following clause shall be substituted, namely: “2. Every trading member shall pay to the Board, a fee in respect of the transactions undertaken by him on the derivatives segment of a recognised stock exchange, at the rate of 0.0002 per cent. of his turnover (Rs.20/- per crore).

Explanation: (A) For the purpose of this clause, the expression ‘turnover’ shall include the value of the trades executed by the trading member on the derivatives segment of the recognised stock exchange and of the trades settled on the expiration of derivatives contracts.

(B) In case of options contracts, ‘turnover’ shall be computed on the basis of premium traded for the option contracts and in case where the option is exercised or assigned, it shall be additionally computed on the basis of notional value of option contracts exercised or assigned.”

(c) for clause 3, the following clause shall be substituted, namely:

“3. (1) Every recognised stock exchange shall collect from every trading member, clearing member and self-clearing member, the fee payable under clause 2 in respect of his turnover in the derivatives segment of that stock exchange in accordance with the provisions of its bye-laws.

(2) The fee collected by a recognised stock exchange under sub-clause 

(1) during a calendar month shall be paid by the stock exchange to the Board by the fifth working day of the following calendar month.

(3) All recognised stock exchanges shall maintain such registers and furnish such returns or information to the Board in respect of the fee collected under this Schedule, as may be specified by the Board.

(4) Without prejudice to sub-clause (3), a recognised stock exchange shall also be liable to furnish such information or explanations to the Board as may be required by it in respect of fee collected or liable to be collected under this Schedule.”

(d) in clause 4, for the words “as specified in clause 2 and 3 above”, the words “as specified in clauses 1 and 2” shall be substituted;

(e) for clause 5, the following clause shall be substituted:

“5. (1) Nothing contained in clause 3 shall affect the primary liability of a trading member to pay the fees under clause 2 or shall preclude the Board from recovering any such fee remaining unpaid by any trading member directly from him.

(2) Where due to the trading member’s default any fee which was liable to be paid on his behalf under clause 3 remains unpaid or is paid belatedly, he shall, without prejudice to any other action that may be taken under the Act, rules or regulations, pay an interest of 15 per cent. per annum for every month of delay or part thereof to the Board.

(3) Every trading member shall be liable to furnish such information or explanations to the Board as may be required by it in respect of fee paid or payable under this Schedule.”

F.No. SEBI/LAD/DOP/ 604 /2006

M. DAMODARAN

CHAIRMAN

SECURITIES AND EXCHANGE BOARD OF INDIA

Footnote:

1. Securities and Exchange Board of India (Stock Brokers And Sub-Brokers)Regulations, 1992, the Principal Regulations, was published in the Gazette of India on October 23, 1992 vide GSR No. 780 (E).

2. The Principal Regulations subsequently amended on :

(a) November 28, 1995 by the SEBI (Payment of Fees) (Amendment) Regulations, 1995 vide S.O. No. 939 (E).

(b) January 5, 1998 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 1998 vide S.O. No. 13 (E).

(c) January 21, 1998 by SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 1998 vide S.O. No. 75 (E).

(d) December 16, 1998 by SEBI (Stock Brokers and Sub-Brokers) (Third Amendment) Regulations, 1998 vide S.O. No. 1078 (E).

(e) July 6, 1999 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 1999 vide S.O. No. 541 (E).

(f) March 14, 2000 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2000 vide S.O. No. 234 (E).

(g) March 28, 2000 by SEBI (Appeal to Securities Appellate Tribunal) (Amendment) Regulations, 2000 vide S.O. No. 278 (E).

(h) August 30, 2000 by SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2000 vide S.O. No. 787 (E).

(i) May 29, 2001 by SEBI (Investment Advice by Intermediaries) (Amendment) Regulations, 2001 vide S.O. No. 476(E).

(j) November 15, 2001 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2001 vide S.O. No. 1128 (E).

(k) February 20, 2002 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2002 vide S.O. No. 220 (E).

(l) September 27, 2002 by SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 vide S.O. No. 1045 (E).

(m) September 23, 2003 by the SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2003 vide S.O. 1095 (E).

(n) November 20, 2003 by the SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2003 vide F. No. SEBI /LAD /20795 /2003.

(o) March 10, 2004 by the Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004 vide S.O. No. 398(E).

(p) August 1, 2006 by the SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2006 vide S.O. 1235 (E).

(q) September 7, 2006 by the SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2006 vide S.O. 1447 (E).

************

Annexure 1

Sub : Option exercised under clause 2    of   Schedule   III   A   of  SEBI (Stock Brokers and Sub Brokers) (Third Amendment) Regulations, 2006 (Regulations) 

We, ______________________ (name of the firm), Member, _____________________ (name of the stock exchange) having SEBI Registration number INB10__________ were granted registration by the Board on _______________ (date of registration) [copy of registration certificate enclosed].

We have not completed five financial years from the date of grant of registration by the Board as on 31^st March, 2006 and are covered by the provisions of clause 1 (c) of Schedule III A of SEBI (Stock Brokers and Sub Brokers) (Third Amendment) Regulations, 2006. / We have completed five financial years form the date of grant of registration by the Board as on 31^st March, 2006 and are covered by the provisions of clause 1 (d) of Schedule III A of SEBI (Stock Brokers and Sub Brokers) (Third Amendment) Regulations, 2006 (Delete whichever is not applicable).

We hereby opt to pay the fee in respect of securities transactions including off market transactions undertaken by us as per Schedule III A of SEBI (Stock Brokers and Sub Brokers) (Third Amendment) Regulations, 2006 with effect from ___________________ .

Thanking you,

Yours faithfully

Compliance Officer

 

DY. GENERAL MANAGER

MARKET INTERMEDIARIES REGULATIONS &

SUPERVISION DEPARTMENT

MIRSD/DR-1/FC/78011/2006

October 03, 2006

 The Executive Directors/ Managing Directors/

Administrators of All Stock Exchanges

 Dear Sir,

Sub: Payment of fees by Stock Brokers- Corrigendum

This has reference to Circular No.MIRSD/DR-1/FC/Cir-15/2006 dated September 29, 2006 regarding payment of fees by stock brokers pursuant to Notification No.S.O.1600 (E) dated September 25, 2006 amending SEBI (Stock brokers and Sub brokers) Regulations, 1992.

In sub para 1 of the aforesaid circular the effective date for exercising option for payment of fees in accordance with the amended  Regulation has been inadvertently indicated as April 01, 2006 instead of April 01, 2007.  Therefore, the sub para 1 of the circular shall be read as follows :

1.        As per sub clause 2 of Schedule III A of Regulations, Stock brokers falling under sub clause (c) and (d) of clause 1 of Schedule III A of Regulations, may opt to pay fees in accordance with this schedule with effect from October 01, 2006 or on April 01, 2007 for which written consent to be given to the stock exchange on or before 31^st day of October, 2006 or 28^th day of February, 2007 respectively, in the format specified in Annexure 1 to this circular.

You are advised to take note of the above. 

Yours faithfully, 

MANOJ KUMAR

DY. GENERAL MANAGER

MARKET INTERMEDIARIES REGULATIONS &

SUPERVISION DEPARTMENT 

MIRSD/DR-1/FC/Cir-15/2006

September 29, 2006

 The Executive Directors/ Managing Directors/

Administrators of All Stock Exchanges 

Dear Sir,

Sub: Payment of fees by Stock Brokers 

SEBI has notified the SEBI (Stock Brokers and Sub Brokers) (Third Amendment) Regulations 2006 vide notification No S.O.1600(E) dated 25^th September 2006 inserting Schedule III-A and amending Schedule IV of the SEBI (Stock Brokers and Sub Brokers) Regulations, 1992 (hereinafter referred to as ‘Regulations’).  The Notification is available on SEBI website - www.sebi.gov.in   

Pursuant to the amendment the Stock Exchanges are advised as follows : 

1.         As per sub clause 2 of Schedule III A of Regulations, Stock brokers falling under sub clause (c) and (d) of clause 1 of Schedule III A of Regulations, may opt to pay fees in accordance with this schedule with effect from October 01, 2006 or on April 01, 2006 for which written consent to be given to the stock exchange on or before 31^st day of October, 2006 or 28^th day of February, 2007 respectively, in the format specified in Annexure 1 to this circular. 

2.         As per clause 5(1) (b) of Schedule III A of Regulations, fee is payable in respect of off market transactions entered into by stock brokers and which are reported to that stock exchange.  The stock brokers having multiple memberships are required to report off market transactions on the respective stock exchanges and shall be required to pay the fees only at the one stock exchange as opted by the stock broker. For this purpose the stock broker shall be required : 

a.      to express in writing the name of the stock exchange where the off market transactions be included for the payment of fees.

b.      to intimate the respective stock exchanges where he is having multiple membership about his intention for inclusion of off market transaction in the chosen stock exchange.          

The stock exchanges shall obtain a declaration from the stock broker with respect to a and b above.   

3.         The stock exchanges shall remit the fees to SEBI by way of a banker’s cheque or demand draft drawn in favour of “Securities and Exchange Board of India”  payable at Mumbai.   While making the payment the stock exchanges shall furnish the information in the format specified in Annexure 2A for stock brokers in cash segment and Annexure 2B for stock brokers in derivative segment. 

4.         The stock exchanges shall amend their bye laws, Rules, Regulations as may be required to give effect to the amended Regulations so as to facilitate collection of fees and deposit the same with SEBI as specified in sub clause (1) of Clause 5 of Schedule III A of regulations and sub clause (1) of Clause 3 of Schedule IV of said regulations.  

5.                  The stock exchanges are also advised to :

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

b.      bring the provisions of this circular to the notice of the member brokers/clearing members of the Exchange and 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 Monthly Development Report for the month of October  2006.

6.         The stock exchanges shall be required to collect the fees in terms of the amended Regulations from October 01, 2006 and first such remittance under the amended Regulations shall be made for the period October 01, 2006 to December 31, 2006 latest by January 05, 2007 and thereafter by the fifth working day of the following calendar month as specified in clause 5(2) of Schedule III A.  

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

Yours faithfully, 

MANOJ KUMAR

Annexure 2A

Name of the Exchange 

Fee payable and received statement for the month of _____________________ for stock brokers in the cash segment 

S.No.	Name of the Stock broker	Trade Name	SEBI Regn. No.	PSU Bonds/Govt. Securities turnover (two-side), if any	Other debt market turnover (two-side), if any	Off market turnover (two-sided), if any	Other turnover (both purchase and sale)	Total Turnover	Fee Payable	Fee Collected
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9) = (5) + (6) + (7) + (8)
				Rs. Crore	Rs. Crore	Rs. Crore	Rs. Crore	Rs. Crore

* If included at this stock exchange for purpose of calculating fees. 

Annexure 2B

 Name of the Exchange

Fee payable and received statement for the month of _____________________ for stock brokers in the Derivative segment 

S.No.	Name of the Stock broker	Trade Name	SEBI Regn. No.	Turnover	Fee Payable			Fee Collected
					CM	Self Clearing Member	Trading Member	CM	Self Clearing Member	Trading Member
(1)	(2)	(3)	(4)	Rs.Crore