note that this is not the complete compendium ,only relevant extracts
*Kindly note that this is not the complete compendium ,only relevant extracts are included.
No person shall be eligible to be qualified as a Trading Member, if such person is less than 21 years of age;
For Companies / Bodies corporate
A company / body corporate shall be eligible to be admitted / selected as a Trading Member of the exchange, if such a company / body corporate fulfils the following legal and financial requirements and other norms for admission.
A company as defined in the Companies Act, 1956 (1 of 1956) shall be eligible to be admitted as a Trading Member of the Exchange if-
Such company is formed in compliance with the provisions of Section 322 of the said Act.
· A majority of the directors of such company are shareholders of the company and also trading members ; and
· The directors of the company , who are Trading Members of the Exchange , have unlimited liability in the company.
A company as defined in the companies Act, 1956 (1of 1956) shall also be eligible to be elected/ selected as a Trading Member of a Stock Exchange, if –
such company is formed in compliance with the provisions of section 12 of the said act; and
· such company undertakes to comply with such financial requirements and norms as may be specified by the securities and Exchange Board of India for registration of such company under the sub- section (1) of section 12 of the Securities and Exchange Board of India Act. 1992 (15of 1992);
No person shall be eligible to be qualified as a trading member if he :–
has not passed graduation / degree examination of a recognized university from any discipline or such higher qualification, as may be prescribed by the Governing Board from time to time; provided wherever any trading member with less qualification has already been admitted prior to these Rules coming into force, such trading member would be allowed to continue without acquiring the prescribed qualification. However such continuing trading member shall be required to undergo refresher course as prescribed under these Rules.
has not worked for a minimum period of two years as partner with or as a sub broker / remisier or as an assistant in the dealing room or in the back office of a trading member, or as a dealer in securities, or as a port folio manager, or as an investment consultant; or has not succeeded to the established business of a deceased or retiring trading member, who is his family member, where he has worked for a minimum period of two years, unless he agrees to work for a minimum period of two years or such period short of the period of two years specified above, as a partner or to work for a such period as a representative trading member with another trading member and enter into transactions on the automated trading system of the exchange not in his own name but in the name of such other trading member;
does not have a minimum net worth , does not possess a minimum working capital of cash and / or marketable securities and does not possess assets belonging to himself and / or his spouse or children of such nature and values as the Governing Board may from time to time determine and consider acceptable;
has been adjudged bankrupt or a receiving order in bankruptcy has been made against him or he has been proved to be insolvent even though he has obtained his financial discharge;
has compounded with his creditors unless he had paid 100 paise in a rupee;
has been convicted of an offence involving fraud or dishonesty;
has been found to be of unsound mind , by a court of competent jurisdiction;
has applied to be adjudicated as an insolvent and the application is pending or has been adjudged an insolvent.
has been convicted by a court of competent jurisdiction of any offence involving fraud or dishonesty or moral turpitude and sentenced in respect thereof to imprisonment for more than six months , and a period of five years has not elapsed from the date of expiry of the sentence;
is engaged as principal or employee in any business other than that of securities or stock broking except as a broker or agent not involving any personal financial liability unless he undertakes to sever his connection with such business within a period of not more than three months from the date this requirement comes into force;
has been at any time expelled or declared a defaulter by any other stock Exchange
has been punished for contravention of any of the provisions of the SCRA and/or the SEBI Act or any Rules or Regulations made there under or any other applicable Act or any Rules or regulations made there under and a period of at least two years or any longer period , as may have been specified by SEBI in its order , has not elapsed from the date of order of punishment , and in case such person is sentenced to imprisonment by a competent court of law, a period of five years has not elapsed from the date of expiry of the sentence, and
has been previously refused admission to trading membership unless a period of one year has elapsed since the date of such rejections.
A person admitted to trading membership is required to undergo, at least at an interval of every three calendar years , a refresher course on the syllabus covering the stock market / capital market, as may be prescribed by the Governing Board and /or SEBI
A person admitted to trading membership of the Exchange even if he is inactive, is required to maintain at any time the base minimum capital , as may be prescribed by the Governing Board and / or SEBI from time to time and such other additional base capital and /or margins as may be required and payable in accordance with the Rules Bye – laws and Regulations of the exchange and the Resolutions or orders issued in that regard , and also pay his dues to the settlement / trade Guarantee Fund of the exchange , as may be prescribed by the Governing Board , from time to time.
In the case of deceased Trading Members where no recorded nomination exists, the legal heirs / legal representatives will be given a notice of maximum period of two years to exercise the right to nominate and if the legal heirs / legal representatives fail to do so , the right of nomination shall vest in the Governing Board . The Governing Board shall then cause to dispose of the right of trading membership of the deceased trading member and release to the legal heirs / legal representatives of the deceased trading member the amount of realization after recovering any cost or expenses incurred in the process of disposal of such right and other liabilities , if any of the deceased trading member.
A person admitted to trading membership of the exchange , is required to pay within the prescribed time all the dues payable to the Exchange including the dues to the settlement Guarantee Fund / Investor protection Fund or any other fund that may be established by the Exchange.
Trading Members shall obtain prior approval of the Exchange/SEBI, for changes proposed in the shareholding pattern, for change of designated directors/ordinary directors and for changes amounting to change in status and constitution.
A trading member is required to submit the audited annual accounts, networth certificate, shareholding pattern, half yearly audit reports and such other declarations and forms, as may be prescribed by the Exchange/SEBI/relevant authority from time to time.
Cochin Stock Exchange, Kochi, India