Secondary Market Department
e-mail : [email protected]
June 18, 2003
The Managing Directors and Executive Directors
of all the stock exchanges
Sub:- Refund of base minimum capital
- SEBI circular no. SMD/SED/Cir/93/22570 dated October 21, 1993,
prescribed an absolute base minimum capital for various exchanges.
The requirements of the base minimum capital were revised and
enhanced vide SEBI circular no. SMD/SED/RCG/270/96 dated January
19, 1996 wherein the requirement of the base minimum capital was
- SEBI has received representations from stock exchanges with a
request for refund/withdrawal of the base minimum capital in view
of the insignificant volumes at the exchanges.
- The issue has been examined and it has been decided to review
the capital requirements as prescribed in our circulars no.
SMD/SED/Cir/93/22570 dated October 21, 1993 and SMD/SED/RCG/270/96
dated January 19, 1996, as follows.
- The exchanges having average daily turnover of less than Rs.1
crore for the past three consecutive months from the date of this
circular may maintain the BMC at Rs 1 lakh. Besides, the exchanges
which would have the average daily turnover less than Rs.1 crore
for any three consecutive months after the date of this circular
would also be eligible to maintain the BMC at Rs. 1 lakh. The
excess of the BMC over Rs 1 lakh may be refunded to the member
subject to the following conditions :
- The member has been inactive at the stock exchange for the
past 12 months, i.e. he has not carried out any transaction on
that stock exchange during the past 12 months.
- There are no investor complaints pending against the member.
- There are no arbitration cases pending against the member.
- The exchange shall retain/deduct/debit from the BMC to be
refunded, the amount of any complaints/claims of the investors
against the member and for dues crystallized and contingent to
the exchange/SEBI arising out of pending arbitration cases,
appealed arbitration awards, administrative expenses, SEBI
turnover fees, e.t.c.
- The exchange shall ensure that the member has paid the SEBI
turnover fees and has obtained a No-Objection Certificate (NoC)
from SEBI in this regard.
- However, if the average daily turnover of the exchange exceeds
the prescribed level of Rs.1 crore for a period of one month at
any time after the date of this circular, the exchange shall
enhance the requirement of the BMC of the members back to the
level stipulated in SEBI Circular No. SMD/SED/RCG/270/96 dated
January 19, 1996 and shall obtain undertaking to this effect from
- The undersigned has been authorised to direct the stock
- to take immediate steps to make necessary amendments to the
relevant bye-laws, rules and regulations for the implementation
of the above decision,
- to 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,
- to communicate to SEBI, the status of the implementation of
the provisions of this circular in Section II, item no. 13 of
the Monthly Development Report for the month of May 2003.
- This circular is being issued in exercise of powers conferred
by section 11 (1) of the Securities and Exchange Board of India
Act, 1992, read with section 10 of the Securities
Contracts(regulation) Act 1956, to protect the interests of
investors in securities and to promote the development of, and to
regulate the securities market.
- The provisions of this circular are applicable with immediate
P K Bindlish