Table Of ContentREGD. NO. D.L.—33004/95
The Gazette Of India
EXTRAORDINARY
PART II—Section 3—Sub-section (ii)
PUBLISHED BY AUTHORITY
No. 28] NEW DELHI, WEDNESDAY, JANUARY 11,1995/PAUSA 21,1916
86 GI/95 (1)
2 THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—SEC. 3 (ii)]
3
Notwithstanding anything to the contrary con-
tained in these Bye-laws, the following shall re-
gulate the transactions between Clients and Brokers:
(1) It shall be compulsory for all Member
brokers to keep the money of the clients in a
separate account and their own money in a sepa-
rate account. No payment for transactions in which
the Member broker is taking a position as a
principal will be allowed to be made from the
client's account. The above principles and the
circumstances under which transfer from client's
account to Member broker's account would be al-
'>>we-! 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
connection with his business as a member—
(i) Moneys received from or on accojnt of
and moneys paid to or on account of
each of his clients and,
(ii) ibe 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
SECURITIES AND EXCHANGE BOARD OF to current or depoist account at bank to be
INDIA kept in the name of the member in the title of which
the words "clients" shall appear (hereinafter referred
NOTIFICATION
to as "clients account"). Member broker may keep
Bombay, the 11th January, 1995 one consolidated clients account for all the clients
or accounts in the name of such client, as he thinks
S.O. 34(E).—Wheeras the Securities and Ex-
fit: Provided that when a Member broker receives
change Board of India is satisfied that it is necessary
a cheque or draft representing in part money be-
in the interest of trade and public interest that the
longing to the client and in part money due to the
bye-law made by the Madras Stock Exchange
Member, he shall pay the whole of such cheque or
Ltd., should be amended as provided hereunder :
draft into the clients account and effect subsequent
Now therefore in exercise of the powers conferred transfer as laid down below in para D (ii).
by sub-section (1) of section 10 of the Securities
(C) What moneys to be paid into "clients ac-
Contracts (Regulation) Act, 1956 (42 of 1956),
count".—No money shall be paid into clients ac-
The Securities and Exchange Board of India hereby
count other than—
makes the amendment to the bye-laws of Madras
Stock Exchange Ltd., specified in the Schedule (i) money held or received on account of
below, and in pursuance of the proviso to sub-
clients;
section (4) of that section, the Securities and Ex-
change Board of India, in the interest of the trade (ii) such money belonging to the Member as
and in public interest and to facilitate regulation may be necessary for the purpose of
of transactions between clients and brokers without opening or maintaining the account;
delay hereby dispenses with the condition of pre-
vious publication of the said amendments to the (iii) money for replacement of any sum which
bye-laws. may by mistake or accident have been
drawn from the account in contravention
SCHEDULE of paraj D given below;
After the existing bye-law 243, the following
(iv) a cheque or draft received by the Member
bye-law being 243A shall be inserted :
representing in part money belonging to
"243A REGULATION OF TRANSACTIONS the client and in part money due to the
BETWEEN CLIENTS AND BROKERS Member.
4 THE GAZETTE OF INCHA : EXTRAORDINARY [PART II—SEC. 3 (ii)]
(D) What moneys to be withdrawn from "clients from client for the same shall be obtain-
-acootmts".—No moaey shall be cteasra from clients ed by Member;
account ether than—
(e) Fully paid for client's securities registered
(i) money properly required far payment to or
in the name of Member, if any, towards
an behalf of clients or for or tcww^ds
margin requirements etc.;
payDaefit of a debt due to the member
from clients -or money drawn -on client's (3) Members Brokers shall make payment to
au&ority, or money in respect of which their clients or deliver the securities purchased
there is a liability of clients to ,the Mem- within two working days of pay-out unless the
ber, provided that money so drawn shall client has requested otherwise. Stock Exchange
not in any case exceed the total of the shall issue a Press Release immediately after the
money so held for the time being for pay-out.
such each client;
(4) Member brokers shall issue the contract
(ii) such money belonging to the Menaber as note for purchase [sale of securities to a client
may have been paid into the client ac- within 24 hours of the execution of the contract.
count under para 1 C(ii) or 1 <G(*v) given
above; (5) In case of purchases on behalf of clients,
Member brokers shall b,e at liberty to close out
(iii) money which may by mistake or accident
the transactions by selling the securities, in case
have been paid into such account in con-
the client fails to make the full payment
travention of para C above.
to the Member Broker for the execution of
the contract within two days of contract note
(E) Right to Hen, set-off etc., mot affected.—
having been delivered for cash shares or
Nothing in this para 1 Shall 4epriwe a Member
before pay-in day (as fixed by Stock Exchange
.broker of any recourse or rijht, whether by way of
for the concerned settlement period), which-
lien, set-off, counter-claim charge or otherwise
ever is earlier, unless the client already has
against moneys standing to the credit of clients
an equivalent credit with the Member. The
account.
loss incurred in this regard, if any, will be
•met -fotomthQ margin ^Heaey of that client.
(2) It sliall be compulsory for all Member
brokers to keep separate accounts tor client's secu-
(6) In case of sales' on behalf of clients,
rities and to keep such %odks of accounts, as may
Member brokers stall ]je ;at liberty to close out the
be necessary, to distinguish such securities from
contract by effecting purchases if the client
his|their own securities. Such accoaats for client's
fails to deliver the securities sold with valid
securities shall, inter-alia, provide "far the follow-
transfer demrnmts within 48 hours «Qf the Con-
ing:—
tract note having ibeen (delivered ©r before
delivery day (as freed by -Stock Exchange
(.a) Securities received for sale or kept pend-
authorities fer 3he onsriBermad seitkoieBt period),
ing deliverv in -the maAet: s
whichever is earlier. HJOBS on <he transaction,
(b) Securities foHy ^>ai4 fee, pending delivery if .any, will be deductible from the margin
to clients; jtaoney of that .client."
<«•) Securities received for transfer or sent
for transfer by the Member, in the name Place ; Bombay
of client or his nominee (s);
"Bated : Mtih. f anoary, 199.5-
(d) Securities that are fully paid for and are [No.. l|30tSE|94]
held in custody by the Member as secu-
rity|margin -etc. Proper authorization S. S. NADKARNI, Ghataaan
Printed by the Manager, Govt. of India Press, Rihg;4ft>a8; Maya <Pnri, *Jow -DolhkL,lflO«
and Published Ttytie Controller of Publications, ®dbMW054. ia&5
