11th February,2011
Members are hereby informed that the SEBI vide its circular no. CIR/MRD/DSA/2/2011 dated February 09, 2011 has advised the Exchange to incorporate the contents of the aforesaid circular in its relevant bye-laws, rules & regulations and also bring the contents of this circular to the notice of the members of the Exchange. Accordingly, the contents of the said circular are appended below for information & compliance: -
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CIR/MRD/DSA/2/2011
February 09, 2011
To
The Managing
Director/Executive Director
of all Stock
Exchanges.
Dear Sir / Madam,
Subject: Arbitration mechanism of stock exchanges - Applicability
of the provisions of the Limitation Act, 1963
This is in continuation of circular ref. No. CIR/MRD/DSA/24/2010
dated August 11, 2010, which inter alia prescribed that the limitation
period for filing an arbitration reference shall be governed by the provisions
of the Limitation Act, 1963. In this regard upon consideration of various
representations received by SEBI and pursuant to the discussions held with the representatives
of stock exchanges, it has been decided that the limitation period, as modified
to three years in terms of Limitation Act, 1963, shall be applicable to cover inter
alia the following cases:-
i. where three years have not yet elapsed and the parties have not
filed for arbitration with the stock exchange, or
ii. where the arbitration application was filed but was rejected solely
on the ground of delay in filing within the earlier limitation period of six
months; and three years have not yet elapsed;
2. The cost for arbitration in such cases would be as under:-
i. Cases which were not filed earlier will be subject to the fee amount
in terms of SEBI circulars dated August 11, 2010 and August 31, 2010.
ii. For cases filed earlier and rejected on the ground of bar of limitation
as per the earlier limitation period of six months, the amount of fee already
paid would be deducted from the amount computed in terms of SEBI circulars
dated August 11, 2010 and August 31, 2010. The balance shall be borne by the
parties to the arbitration in the manner specified vide SEBI circulars dated August
11, 2010 and August 31, 2010.
3. Stock exchanges are advised to widely publicise (including in
media) the provisions of this circular. In addition to the above, stock
exchanges are also directed to inform those applicants who are eligible to file
for arbitration in terms of sub-para (ii) of first para of this circular.
4. The recognized stock exchanges are advised to:-
i. make necessary amendments to the relevant rules/ bye-laws/ regulations
for the implementation of the above decision immediately;
ii. bring the provisions of this circular to the notice of the
members of the stock exchange and also to disseminate the same through their website;
and
iii. communicate to SEBI, the status of implementation of the provisions
of this circular in the Monthly Development Reports to SEBI.
5. It is clarified that inspection of stock exchanges by SEBI
shall cover implementation of this circular.
6. This Circular is issued in exercise of the 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, with a view
to protect the interests of investors in securities and to promote the
development of, and to regulate the securities market and shall come into
effect immediately.
7. This Circular is also available on SEBI website at www.sebi.gov.in.
Yours faithfully,
Rajesh Kumar D
Deputy General
Manager
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(Chief Operating Officer)