17th February, 2005
Re: Election to the Governing
Board of Stock Exchanges
Members are hereby informed that the Exchange has
received circular no.MRD/DoP/SE/Cir-5/ 2005 from SEBI. The
said circular, which is self explanatory, is reproduced below.
DEPUTY GENERAL MANAGER
Market Regulation
Department
E-mail: sundaresanvs@sebi.gov.in MRD/DoP/SE/Cir-
5/2005
February 9, 2005
The Executive Directors / Managing Director/Administrators
of All Stock Exchanges
Dear Sir / Madam,
Sub: Election to the
Governing Board of Stock Exchanges
1. Whenever
the Governing Board of a Stock Exchange fails to comply with the provisions of
the SC(R)A, SC(R)R, Bye-laws of the Stock Exchange and/or fails to implement
the Directions/Guidelines issued by SEBI from time to time, it results in
failure in governance. On such occasions, in order to ensure the safety and
integrity of the Stock Exchange and that the transactions on the Stock Exchange
are carried out as per the regulatory framework and the interest of investors
are not jeopardized, SEBI in exercise of its powers u/s 11 of the SC(R)A has
superceded the Governing Board of the concerned Stock Exchange and has
appointed an Administrator for specified period.
2. As a
matter of better governance of the Stock Exchange, it is felt necessary that
members of Stock Exchange who were on the Governing Board of the Stock Exchange
at the time of supercession need to be excluded from the reconstituted
Governing Board of the Stock Exchange for a period of two years, as they had
earlier failed to take effective action during their tenure on the Governing
Board.
3. Therefore,
it has been decided that a member of the Stock Exchange who was on the
Governing Board of the Stock Exchange at the time of its supercession would not
be eligible for re-election to the Governing Board of the Stock Exchange for a
period of 2 years from the date of expiry of the order of supercession passed
by SEBI. Further, the Stock Exchanges may provide for this disqualification in
their Rules.
4. Accordingly,
the Stock Exchanges are advised to –
4.1 ensure
compliance of requirements of para 3 of this circular.
4.2 make necessary
amendments to the relevant rules in accordance with the above decision immediately.
4.3 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.
4.4 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
February 2005.
5. 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,
V
S SUNDARESAN
Members are advised to note the
provisions of the aforesaid circular .
Secretary