Dated: 1^st September 2003

NOTICE

Re: MODE OF PAYMENT AND DELIVERY BY MEMBERS TO THEIR CLIENTS

Members are informed that further to Circular No. SMD/SED/CIR/93/23321 SEBI had issued a Circular vide SEBI/MRD/SE/Cir-33/2003/27/08 dated 27^th August 2003 regarding regulation of transactions between the brokers and their clients.

In the said circular of SEBI dated 27^th August 2003, SEBI had issued the following directions to members of Stock Exchanges with regard to the transaction executed by members for their clients.

1. Brokers should not accept cash from their clients whether against obligations or as margin for purchase of securities and / or give cash against sale of securities.

2. All payments shall be received / made by the brokers from / to their clients strictly by account payee crossed cheques / demand drafts or by way of direct credit into the bank account through EFT, or any other mode allowed by RBI. The brokers shall accept cheques drawn only by the clients and also issue cheques in favour of the clients only, for their transactions. However, in exceptional circumstances the brokers may receive the amount in cash, to the extent not in violation of the Income-tax requirement as may be in force from time to time.

3. In 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 approved scheme of the stock exchange and / or SEBI.

Members may note that the above mentioned Circular dated 27^th August 2003 had been issued by SEBI in exercise of powers conferred under 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.

Secretary