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I GATEWAY TO INDIA’S CAPITAL MARKET
www.bseindia.com
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 Index
Page Numbers
Sr. No. Particulars
From To
1
Eligibility & Qualification of becoming a member 2 5
2 Terms and Conditions of Deposit Based Membership (Trading
6 8
Membership)
3 Specimen application form for making the offer for Deposit Based
9 9
Membership (Trading Membership)
4 DBM (TM) Rules & Regulations 10 11
5 Application Process for cash segment 12 12
6 Documentation to be done for Corporate Trading Membership 13 14
7 Documentation to be done for Individual Trading Membership 15 15
8
Rule 257A (vi) 16 16
9
Designated Directors 17 18

10
Derivative Membership Guide 19 20

11
General Queries 21 22

1
 Eligibility and Qualifications of becoming a member of Bombay Stock
Exchange Ltd.(BSE Ltd.)

• What are the eligibility requirements for becoming a Trading Member of BSE Ltd.?

Relevant Extracts of Rule 17 of Rules, Bye-Laws & Regulations of the Exchange are reproduced
as below:

Conditions of Eligibility

No person shall be eligible to be elected as a member if-

Age
(i) He is less than twenty-one years of age

Nationality

(ii) He is not a citizen of India:

Provided that the Governing Board may in suitable cases relax this Condition with the prior
approval of the Central Government

Educational Qualification

(iiA) He has an educational qualification of less than either matriculation or the 10 plus 2 years’
qualification of the 10 plus 2 plus 3 years’ educational system or such other educational
qualification as may be prescribed by the Governing Board from time to time; Provided that the
Governing Board may in exceptional cases, with the previous approval of the Central
Government relax this condition

Bankruptcy

(iii) He 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 final discharge

Composition with Creditors

(iv) He has compounded with his creditors unless he has paid sixteen annas in the Rupee;

Fraud

(v) He has been convicted of an offence involving fraud or dishonesty;

Other Business

(vi) He is engaged as principal or employee in any business other than that of securities except
as a broker or agent not involving any personal financial liability unless he undertakes on
admission to sever his connection his connection with such business

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Connections with Other Forward Markets

(vii) he is associated with or is a member of or a subscriber to or a shareholder or debenture

holder in or is connected through a partner or employee of a member of or is a member or
director of or debenture-holder in a company which is a member of or debenture holder in any
other organization, institution, association, company or corporation where forward business of
any kind whether in goods or commodities or otherwise is carried on unless he undertakes on
admission to sever such association or connection

Expelled Member or Defaulter

(viii) He has been at any time expelled or declared a defaulter by any other Stock Exchange

Previous Rejection
(ix) He has been previously refused admission to membership unless a period of one year has
elapsed since the date of such rejection.

• What is the qualification for becoming a Trading Member of the Exchange?

Relevant Extracts of Rule 18 and 19 (A) of Rules, Bye-Laws & Regulations of the Exchange is
reproduced as below:

Extracts of rule 18:-

No person eligible for admission as a member under these Rules shall be admitted as a member
unless –

Past Experience

(i) He worked for not less than two years as partner with or as an authorized clerk or remisers or
apprentice to a member; or

Partner or Representative Member

(ii) He agrees to work for a minimum period of two years as a partner or to work for such
period as a representative member with another member and enter into bargains on the trading
system of the Exchange not in his own name but in the name of such other member; or

Established Family Business

(iii) He succeeds to the established business of a deceased or retiring member who is his father,
uncle, brother or any other person who is in the opinion of the Governing Board a close
relative;

Work Experience

(iv) He has, in the opinion of the Governing Board, not less than two years experience in
connection with various activities relating to the securities market; or

3
Financial Soundness

(v) he has a minimum net worth; possesses a minimum working capital of cash and/or
marketable securities; and possess assets belonging to himself and/ or spouse or children; of
such nature and value as the Governing Board may from time to time in its opinion determine
and consider acceptable; and

(vi) He qualifies in a written test conducted by the Exchange and in case of a corporate
member, the directors referred to in sub-clause (v) of Rule 19A(b) qualify in a written test
conducted by the Exchange, and in the case of a Financial Corporation the Chief Executive
Officer and another director/officer both possessing experience as provided in sub-clause (v) of
Rule 19A(b) qualify in a written test conducted by the Exchange.

Provided that the Governing Board may waive compliance with any of the foregoing conditions
if the person seeking admission is in respect of means, position, integrity, knowledge and
experience of business in securities considered by the Governing Board to be otherwise qualified
for membership.

3 Firms Ineligible

19. A partnership firm as such shall not be eligible for membership of the
Exchange;

Companies

19A. (a) A company as defined in the Companies Act, 1956 (1 of 1956) shall be
eligible to be elected as a member of the Exchange if –

(i) Such company is formed in compliance with the provisions of Section 322 of the said
Act;

(ii) A majority of the directors of such company are shareholders of such company and
also members of the Exchange; and

(iii) The directors of such company, who are members of the Exchange, have unlimited
liability in such company;

Provided that where the Central Government makes a recommendation in this regard the
Governing Board of the Exchange shall, in relaxation of the requirements of this clause admit as
member the following corporations, companies or institutions (collectively referred to as “the
financial corporation”) namely -
(i) The Industrial Finance Corporation of India established under the Industrial Financial
Corporation Act, 1948 (15 of 1948);

(ii) The Industrial Development Bank of India established under the Industrial
Development Bank of India Act, 1964 (18 of 1964);

(iii) The Life Insurance Corporation of India established under the Life Insurance
Corporation Act, 1956 (31 of 1956);

4
(iv) The General Insurance Corporation of India constituted under the General Insurance
Corporation (Nationalization) Act, 1972 (57 of 1972);

(v) The Unit Trust of India, established under the Unit Trust of India Act, 1963 (52 of
1953);

(vi) The Industrial Credit and Investment Corporation of India Ltd., a company registered
under the Companies Act, 1956 (1 of 1956);

(vii) The subsidiaries of any of the corporations or companies specified in (i) to (vi) and any
subsidiary of the State Bank of India or any Nationalized Bank set up for providing
merchant banking services, buying and selling securities and other similar activities.

19A. (b) A company as defined in the Companies Act, 1956 (1 of 1956) shall also be eligible to
be elected as a member of a Stock exchange if –

(i) Such company is formed in compliance with the provisions of Section 12 of the said Act;

(ii) Such company undertakes to comply with such financial requirements and norms as may
be specified by the Securities and Exchange Board of India for the registration of such
company under sub-section (1) of Section 12 of the Securities and Exchange Board of
India Act, 1992 (15 of 1992);

(iii) The directors of the company are not disqualified for being members of a stock exchange
under clause (1) [except { sub-clause (b) and } sub-clause (f)] or clause (3) [except { sub-
clause (a) and } sub-clause (f)] of Rule 8 of the Securities Contracts (Regulation) Rules,
1957, and the Directors of the company had not held the office of the Directors in any
company which had been a member of the stock exchange and had been declared
defaulter or expelled by the stock exchange; and

(iv) Not less than two directors of the company are persons who possess a minimum two
years’ experience:

(a) In dealing in securities; or

(b) As portfolio managers; or
(c) As investment consultants.

5
 Terms and conditions
Bombay Stock Exchange Ltd. (BSE Ltd.) is admitting Deposit Based Members (Trading
Memberships) on "Cash Segment” of BSE Ltd. We are inviting applications from all over the
country against a deposit of Rs. 10,00,000/- (Rupees Ten lakhs Only). The successful applicants
would also be eligible for F & O Trading membership (applications to be made separately for
the same).

Persons desirous to apply for Trading Membership of the "Cash Segment" of BSE Ltd. may
send their applications in writing in a sealed envelop marked " Offer for Deposit Based
Membership" and addressed to the Chief General Manager – Member/Institutional Sales,
Bombay Stock Exchange Limited (BSE Ltd) 15th Floor, P.J. Towers, Dalal Street, Fort, Mumbai
400 001.

The applicants must note the following terms and conditions:

The Trading Member has only trading rights and no ownership rights of BSE Ltd.

1. The applications should be complete in the prescribed formats and in all respects.
2. The specimen of the application form as well as the other material including the terms and
conditions and salient features of the Trading Membership are available with the Publications
Department on Ground Floor of BSE or can be downloaded from the BSE website.
www.bseindia.com/dbm.asp The Rules, Bye-Laws & Regulations of BSE can also be
downloaded from the web site http://www.bseindia.com/about/downloads.asp
3. The application form in the prescribed format, complete in all respects should be
accompanied by a Payee`s A/c Demand Draft/Pay Order for Rs. 1 lakh (Rupees One lakh only)
drawn in favor of "Bombay Stock Exchange Limited" towards earnest money deposit on which
no interest will be payable.
4. The earnest money deposit of Rs. 1 lakh (Rupees One lakh only) shall be interest free and
be refunded (without interest) to the unsuccessful applicants who are rejected on account of
such applicants not meeting eligibility criteria or requirement as may be prescribed by BSE from
time to time.
5. Applications can be made by individuals and corporates who are eligible to become a
Trading Member of BSE in accordance with the Rules, Bye-Laws & Regulations of BSE and
subject to such terms and conditions as may be decided by BSE from time to time.
6. The successful applicants whose offers are accepted by BSE shall be required to pay the
balance amount of the deposit before commencement of business.
7. The interest free deposit (10 Lacs) of the Trading Members will not have any Lock - in
period. However, any trading member who wants refund of Interest Free Deposit of Rs.10 lacs
shall be first required to apply for surrender of trading membership right. Before applying for
surrender of trading membership right, such member shall ensure voluntary closure of business.
The voluntary closure should be at least for a period of 6 months prior to the date of surrender.
Where the trading terminals of the member have remained deactivated for a period of 6 months
prior to the date of surrender it shall be construed as closure of business. On receipt of
application for surrender, the Exchange will give Public Notice in newspaper to enable the
investors /public to lodge claims, if any, against surrendering trading member, giving a period of

6
3(three months) from the date of Public Notice. However, this condition would not apply to the
members who have not commenced business or have not activated their trading terminals at all.
Further, the amount of Interest Free Deposit will be refunded only after recovering outstanding
amount if any by BSE and after getting NOC from SEBI.
8. In addition to the aforesaid amount of Rs.10 lakhs (interest-free deposit), the Trading
Member has to pay the following amounts before commencement of business:
a) Base minimum Capital - Rs.1,25,000 in cash and Rs. 8,75,000/- (Cash or Cash Equivalent)
b) Trade Guarantee Fund - Rs.10,00,000(either in cash or in the form of Bank Guarantee or
FDR)
c) Admission Fees (non-refundable) - Rs. 5,000/- + (Service Tax as applicable) Admission
fees would be Rs 5,000/- if applicant applies for both the segments: Equity and
Derivatives or in case the applicant applies only for equity membership then admission
fees will be Rs 2,50,000/-
d) Annual Subscription - 25,000/- + (Service tax as applicable)
e) Initial Contribution towards TGF - 10000/- + (Service Tax as applicable)

Any other amount so required by BSE Ltd.

9. BSE will be entitled to accept the applications for Deposit Based Membership on such
parameters and criteria as may be decided by BSE from time to time.
10. BSE reserves the right to reject any application without assigning any reason whatsoever.
11. The decision of BSE will be final and binding in all respects.
12. Applicants will have to ensure that the Designated Directors of the applicant company are
in full time employment of the applicant company.
13. There is 2 months time limit given to the applicant to submit all the relevant documents to
the exchange from the date of acceptance of his offer by the exchange.
14. If the member wants to withdraw his application, Earnest money of Rs. 1,00,000/- would
be refunded after deducting a processing fee of Rs. 10,000/- plus service tax as applicable.
15. In case the member wants to commence business only in the mutual fund segment, he
need not deposit BMC/TGF with the Exchange.
16. After receipt of SEBI Registration Certificate the member should commence business
(equity or mutual fund) within 90 days of receipt of the same. In case the member does not
commence business within the aforesaid time period then the exchange will impose a penalty of
Rs. 50,000/- which will be recovered against the member’s Earnest Money Deposit of Rs. 1 Lac.

7
For any further information/clarification, interested applicants are requested to contact the
following officials in Member / Institutional Sales Department:

1. Mr. Mayuresh Samant: 22728355

Email: mayuresh.samant@bseindia.com

2. Mr. Manthan Desai: 22728890

Email: manthan.desai@bseindia.com

3. Ms. Shikha Chauhan: 22728749

Email: shikha.chauhan@bseindia.com

Information on Deposit Based Membership will also be available at following Service

Centres of BSE Ltd.:

1) Kolkata : Mr. Purushottam Saraf 033-22130530

Ms. Priyanka Agarwal

2) Delhi : Mr. Rajeev Garg 011-41510480

Mr. P. R. Prasad

3) Ahmedabad : Mr. Malav Chokshi 079-27540445

Mr. Anoop Dwivedi

4) Rajkot : Mr. Kartik Bavishi 0281-6595542

5) Chennai : Mr. Vishnu Vardhan M. 044-42163999

6) Cochin : Mr. Sumith C.S. 0484-2405275

7) Hyderabad : Mr.Sanjeev Kumar Jaiswal 040 - 23237563

8
 Specimen application form for making the offer
(on letter head of the individual/ corporate entity)

Date :

Chief General Manager,

Member/Institutional Sales,
BSE Ltd. 15th Floor,
P.J. Towers, Dalal Street,
Fort, Mumbai 400 001

Sir ,

Sub: Amount of offer: (In figures): Rs.10,00,000/- (In words): Ten Lakhs

Please acquaint BSE Ltd., that I/we am/are desirous of being admitted as a member with
trading rights only on the "Cash and Derivatives Segment (Trading Member or Clearing
Member *) of the Exchange" on the terms and subject in all respects to the Rules, Bye-laws &
Regulations of the Exchange which now are or hereafter may be for the time being in force.

I/We have read & understood the aforesaid Rules.

I/We the applicant company am/are agreeable to the selection and admission procedure, as
stipulated in the advertisement issued by the Exchange and the discretion of the Governing
Board of the Exchange shall be final and binding upon us.

Following details are as under :

1. Name of the contact Person
2. Email address
3. Telephone No.
4. Mobile No.

Yours faithfully,

Name:

Signature:

(Individual / Designated Director)

9
 Deposit based membership Rules & Regulations
Rule 35B of the Rules, Bye-laws and Regulations of the Exchange is re-produced below:

Limited Trading Membership

35B.
(1) The Exchange may elect and admit one or more persons as Limited Trading Members of
the Exchange ("Limited Trading Member") in accordance with guidelines prescribed by the
Governing Board from time to time.

(2) Subject to the provisions of Sub-rule (3), and the scheme of Corporatisation and
Demutualisation of the Exchange as approved by SEBI, a Limited Trading Member shall be a
member of the Exchange in all respects and for all purposes and shall have all the rights,
privileges, obligations and liabilities of a member of the Exchange, and shall have the right to
carry on business as an intermediary in the Equity Market Segment and/or the Debt Market
Segment of the Exchange as prescribed by the Governing Board from time to time. All the
Rules, Bye-laws and Regulations of the Exchange shall apply mutatis mutandis to a Limited
Trading Member as they apply to any other member of the Exchange. Provided however that
where the Governing Board permits a Limited Trading Member to carry on business in Equity
Market Segment and/or the Debt Market Segment of the Exchange as set out hereinabove, the
Governing Board shall, from time to time, prescribe detailed guidelines, terms and conditions
including but not limited to guidelines, terms and conditions relating to the nature and amount
of deposit to be kept with the Exchange, capital adequacy norms, margin requirements etc., for
each such market/segment or combination thereof. Provided further that deposit kept by a
Limited Trading Member for acquiring the Limited Trading Membership, as set out hereinabove
shall remain with the Exchange during the tenure of such membership.

(3) Notwithstanding anything stated above or elsewhere in these Rules, Bye-laws or

Regulations, -

i. A Limited Trading Member, the legal representatives of a deceased Limited Trading

Member, his heirs, the persons mentioned in Appendix C to these Rules or the Governing
Board shall have a right of nomination in respect of a Limited Trading Membership or a
former or lapsed Limited Trading Membership;

ii. A Limited Trading Member or a partner or representative of a Limited Trading Member

shall not, as such Limited Trading Member or partner or representative, be entitled to be a
member of the Exchange’s Governing Board or of any other Board, Council or
Committee of the Exchange or any Segment of the Exchange and shall not, as such
Limited Trading Member or partner or representative, be entitled to hold any office or
post in the Exchange or any Segment of the Exchange; and

10
 iii. A Limited Trading Member shall not, as a Limited Trading Member, be entitled to voting
rights on any matter save and except on resolution to be passed by the members of the
Exchange for amending the Rules or Bye-laws of the Exchange which would prejudicially
affect the rights of Limited Trading Members;
Provided always that the provisions of sub-clause (iii) above shall not entitle a Limited Trading
Member to initiate or move any resolution but to merely vote on a resolution of the nature
described herein and the Rules, Bye-laws and Regulations of the Exchange shall be
construed accordingly.
4. If a member holds one or more memberships of the Exchange which are not Limited
Trading Memberships and holds one or more Limited Trading Memberships then such Limited
Membership(s) shall not limit or prejudice such member’s rights in respect of the first
mentioned membership(s).

5. The Exchange may from time to time modify the form prescribed in the Appendices hereto
in relation to their applicability to Limited Trading Members or applicants for Limited Trading
Membership or may prescribe other forms for Limited Trading Members or applicants for
Limited Trading Membership.

6. The register of members maintained by the Exchange pursuant to Rule 64 shall also indicate,
in respect of each Limited Trading Member, that such member is a Limited Trading Member.

11
 Application process for CASH Segment

• Application to be filled by the interested applicant as per the specimen copy for the Trading
Membership with a Demand draft of Rs.1,00,000/- in favor of “Bombay Stock Exchange
Ltd.” and MOA & AOA duly certified by CA to be submitted.

• The Application should be addressed to the Chief General Manager – Member/Institutional

Sales of BSE Ltd.

• The applicant has to provide all the documents as per the checklist. The Trading Member, so
admitted has to give SEBI form “A” .

• The applicant should obtain status report/NOC from the Exchange where he / she / is a
member.

• Application is then placed before the Membership Committee for its consideration.

• Once the Committee approves the application, the Election & admission letter is issued to
them and then the application is forwarded to SEBI for SEBI registration. The applicant has
to pay the balance amount as specified below before commencement of business:

Sr. Particulars Amount (in Rs.)

No.
1 Balance deposit (Cash) 9, 00,000/-
2 Admission fee (Cash) 5,000/-*
3 Annual Subscription of BSE Ltd (Cash). 25,000/-*
4 Base minimum capital (1.25 Lacs Cash & 8.75 Lacs 10, 00,000/-
Cash/Cash Equivalent)
5 Trade Guarantee Fund (BG/FDR/Cash) 10, 00,000/-
6 Initial Contribution towards TGF (Cash) 10,000/-*
• * Service tax is applicable
• Admission fees would be Rs 5,000/- if applicant applies for both the segments: Equity
and Derivatives else in case the applicant applies only for equity membership then
admission fees will be Rs 2,50,000/-

Note:

1) Admission fees, Annual Subscription and Initial Contribution towards TGF are non –
refundable.

2) Payment should be made separately for Balance Deposit, Admission Fee, Annual
Subscription, Base minimum Capital (BMC), and Initial contribution towards TGF

3) No Exposure is provided on Base Minimum Capital (BMC)

12
 Check List for TRADING MEMBERSHIP

Sr. Documents to be given Documents Remarks

No. submitted
1. Appendix A - II
2. Auditors Certificate
3. Annexure - II (Details of the Company)
4. Memorandum and Articles of Association
5. Prospectus or statement in lieu of prospectus
6. Short History of the company and its activities on letter head of
company signed by directors.
7. Capital Structure *(Authorised capital, Issued capital and
subscribed capital (On the members letter head)
8. Shareholding Pattern in respect of each shares. (Sr. No. | Name
of the shareholder | Percentage of Holding and Amount
Holding) *(In case a member has a corporate entity as its
shareholder/s then the shareholding pattern of that corporate
entity would required to be submitted till the last individual
shareholder/s is identified)
9. Board resolution authorising the directors to apply for
membership.
10. Net worth Certificate (certified by C.A.) & statement of
calculation as per the annexure attached. *
11. Balance Sheet (Including All schedules) in concurrent to the Net
worth statement submitted. *
12. NOC / Status report from the Stock Exchange (s) where an
applicant company is a member (s).
13. Details of all the Directors of the applicant company on letter
head signed by directors. (Form C 3)
14. Certified PAN Card copy
Documents to be submitted for Derivative Segment
15. Networth Certificate & Computation of Networth as per L C
Gupta Format (Minimum Networth Requirement : TM - 25 Lacs
TCM - 3 crores, SCM – 1 Crore) to mention the following on the
top of networth certificate. 'Networth certificate as per Regulation 16
(C) of SEBI stock Broker and Sub Brokers.'
16. Details of the Compliance Officer
17. 2 Point Undertaking
18. Certified copy of Passed Certification Programme for atleast two
approved users.
19. Consent Letter from Associate Clearing Member (in case of
Trading Members only)
*Documents pertaining to the Company duly certified by a chartered accountant as
true & correct

13
 Documents to be submitted by each Designated Directors

Name of the Designated Director

Sr. No. Documents to be given

1. Annexure – I(format to be provided after acceptance of offer)
2. Board Resolution Authorising appointment of designated director
3. A brief Bio Data of the Designated Director (self signed on plain paper/on letter
head of individual director)
4. Certificates of educational Qualifications
5. Certificates relating to Experience in the Capital market
6. If the Designated Director is a member of any other Stock Exchange in his
individual capacity then the Designated Director has to submit
NOC/Status report of that particular Exchange also. If an associate
concern/entity is a member of any other stock Exchange then the NOC /
Status report of that particular exchange is also to be submitted
7. Certified Pan Card copy
8. A certificate to be submitted on the letterhead of C.A. as per following format:
This is to certify that <name of proposed designated director/s> of <name of the
applicant company> possesses a minimum of 2 years capital market experience as
required under the provisions contained in Rule 8 sub-rule 4A sub-clause (v) of
Securities Contract
(Regulation) Rules, 1957.
Signature.
with Rubber Stamp & Membership No.
Place :
Date :
9. Copy of Form No. 29 and 32 filed with ROC.
10. Certificate of BCFM/NCFM Exam conducted by BSE/NSE

THESE DOCUMENTS ARE TO BE SUBMITTED ONLY AFTER APPLICANT

RECEIVES THE LETTER OF ACCEPTANCE OF OFFER.

14
 Check List for Individual Membership
Note: Please request you to submit the forms in the serial number as mentioned in the
checklist for faster processing of the application

1. Age proof (copy of PAN card) and copy of educational qualifications

Minimum Age : 21 Years completed as on date of Application.

2. Certificates of experience

3. Your bio-data giving name, educational qualification, date of birth, age as on date of
application and complete details of experience in capital market.

4. Networth Certificate alongwith concurrent Balance Sheet as on such date not older than
3 months preceding the date of application (duly certified by C. A.)
5. Statement of investment (quoted & un-quoted) at cost & market price as on such date
for which latest documents are submitted as mentioned in point No. 4 above (Duly
certified by C.A).
6. List of Receivables/debtors which are due and outstanding for more than six months
(Duly certified by C.A.)

7. Status Report from the Stock Exchange of which you are a member.

8. Certificate of BCFM/NCFM Examination conducted by BSE Ltd./NSE

9. All SEBI undertaking mentioned in Page 7 of the Basic Guidelines and Application
Form.
10. SEBI Form A & AA mentioned in Page 29-41 of the Basic Guidelines and Application
Form
11. Such other documents as may be called for and be required by the Exchange.

12. Questionnaire

For check list pertaining to Derivatives please refer page no. 13

[*] Documents must be certified by a chartered accountant as true and correct.

15
 ( Rule 257A (vi)

Rule 257A (vi) of the Rules, Byelaws and Regulations of the Exchange is reproduced below:

“In the case of a company formed under Rule 19A(b) of the Rules, Bye-Laws and Regulations of
the Exchange, the company shall declare its dominant shareholders at the time of seeking
admission to the membership of the Exchange and shall appoint at least one of the dominant
shareholders as one of its Designated Directors.

If, however, it is not feasible for a company to appoint one of its dominant shareholders as a
Designated Director, then the company shall appoint at least two Designated Directors, who
should possess

(a) educational qualification of not less than graduation and;

(b) minimum of two years’ experience in capital markets.

The Designated Directors so appointed shall each hold a minimum of 5% shares in the paid up
capital of the company.

Provided further that the Governing Board will have the power to waive the above requirement
for a company (including a company promoted by Non-Resident Indians) on such conditions as
it finds fit subject to provisions of Rule 8(4A) of S.C. (R) Rules, 1957.

The Governing Board will have the power to define the concept of Dominant Shareholder.

16
 Designated Directors

Every Applicant Company is required to nominate at least two whole-time

directors(“Designated Directors”) for the purpose of taking the written test, appearing for the
interview and otherwise representing the Applicant Company as may be required by the
Committee of Executives / Board of Directors. The Designated Directors should have a
minimum of two years’ experience in dealing in securities or as portfolio managers or as
investment consultants. The Designated Directors must hold minimum 40% of their
shareholdings in the Company. An undertaking by relatives / shareholder can be given if the
above requirement is not fulfilled.
Certificate Dated _______
Submitted by ___ (name of the company) to BOMBAY STOCK EXCHANGE LTD.
UNDERTAKING FROM RELATIVE / SHAREHOLDER CONSTITUTING

DOMINANT GROUP
I, __________________(father/son/or any other relative) of __________(name of the
designated director), resident of _____________(residence address) am the absolute owner of
______ number of shares of Rs.______ each, Rs____ Per share paid up, which
constitutes_____%(percentage) of the total paid up capital of the company
of__________________(company name) as on this date.

I state that I shall irrevocably and unconditionally support in respect of my shareholding in favor
of ____________ (name of the designated director), a shareholder in the above mentioned
company. I further state that I have no objection to my above mentioned shareholding being
clubbed with the shareholding of ____________________(name of the Designated Director),
who is my _____(specify the relation) for the purpose of determining the dominant promoter
group of the said company.

This support is irrevocable and I also undertake to take prior approval from BOMBAY STOCK
EXCHANGE LTD. before selling or otherwise transferring any part of whole of my above
mentioned shareholding.

(Signature / Name of the person)

Place :
Date :
WITNESS BY:
Signature :
Name :
Address :
Date :
Place :

Note : (1) In case of corporate shareholder giving support to the Designated director should
submit copy of board resolution for the same.
(2) An individual / body corporate can at a time give support to only one designated
director in respect of shareholding.

17
 CERTIFICATE

This is in certify that the Shareholding pattern in ————-—————————————

(name of the company) as given above, based on my /our Scrutiny of the book of accounts,
records and documents is true and correct to the best of my /our knowledge and as per
information
provided to my/our satisfaction.

To be certified by C.A.

with membership No.

Place:

Date:

Declaration cum undertaking from the applicant company &/or holding company
We hereby declare that the directors/designated directors of thecompany were/are not debarred
and/or no actions were/are initiated against them by the Securities And Exchange Board of
India from associating from the capital market AND the company undertakes that it will not
appoint any
such person/s , in future, as director(s)/designated director(s) of the company.

In view of the frequent changes in the designated directors of the existing corporate members, in
most of the cases of new applications, the Management Committee of Bombay Stock Exchange
Ltd. insists to have more than two designated directors for the benefit of the applicant company.

It is to be noted that as per the internal norms of the Exchange a Designated Director should be
above age of 21 years.

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 Derivatives Membership Guide
Types of Membership

A. Trading Cum Clearing Member (TCM)

B. Self Clearing Member (SCM)
C. Trading Member (TM)

Trading Cum Clearing Member

1) Who can become a member of the Derivatives segment as a TCM?

Any member of the cash segment of the Exchange is eligible to become Trading cum
clearing member of the Derivatives Segment.

2) What are the criteria of becoming a Trading cum Clearing Member of the
Exchange?
) Networth Rs. 3 Crores (as per the format prescribed by LC Gupta committee
report)
) Minimum security Rs. 50 Lakhs– (whole of Rs.50 lakhs can be given in the form Bank
Deposit Guarantee/ FDR/cash) (This amount is payable after SEBI
registration)
) SEBI Annual Charges Rs. 50,000/- for clearing Membership.

Self-Clearing Member
1) Who can become a member of the Derivatives segment as a SCM?
Any member of the cash segment of the Exchange is eligible to become Self-Clearing
member of the Derivatives Segment.

2) What is the difference between Self-Clearing Member and Trading cum Clearing
Member?
The only difference between SCM and TCM is that SCM does not have the rights to
clear the trades of other members he can only clear his trades, whereas TCM can clear
the trades of any other member.

3) What are the criteria and annual charges of becoming a Self-Clearing Member of
the Exchange?
) Networth Rs. 1 Crores (as per the format prescribed by LC Gupta committee
report)
) Minimum security Rs. 50 Lakhs– (whole of Rs.50 lakhs can be given in the form Bank
Deposit Guarantee/FDR/ Cash) (This amount is payable after SEBI
registration)
) SEBI Annual Charges Demand Draft of Rs.50, 000/- drawn in favor of Bombay Stock
Exchange Ltd, Mumbai.

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 Trading Member
1) Who can become a member of the Derivatives segment as a Trading Member?
Any member of the cash segment of the Exchange is eligible to become Trading
member of the Derivatives Segment

2) What are the criteria of becoming a Trading Member of the Exchange?

) Networth Rs. 25 Lakhs (as per the format prescribed by LC Gupta committee
report)
) Minimum security Rs.7.5 Lakhs (To be deposited with the clearing member after SEBI
Deposit registration but before commencement)

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 GENERAL QUERIES

• What is the net worth requirement for becoming a deposit based member?
The minimum net worth criteria for becoming a Trading Member of the Exchange is 30 Lakhs. This
net worth criteria is applicable to individuals as well as to corporate applicants.

• What is the Networth requirement for Derivatives segment?

Trading Cum Clearing Member (TCM): 3 Crore
Self Clearing Member (SCM): 1 Crore
Trading Member (TM): 25 Lacs

• What is the minimum paid up capital requirement?

The minimum paid up capital of the firm as per SEBI norms is 30 Lakhs

• Which other membership is offered along with Deposit Based Membership?

Derivatives Membership – along with cash segment
(Admission fees would be Rs 5,000/- if applicant applies for both the segments: Equity and
Derivatives else in case the applicant applies only for equity membership then admission fees will be
Rs 2,50,000/-)
Corporate Debt & Mutual Funds - Once the member receives SEBI registration (Equity).

• If I am sub – broker of BSE Ltd., is it compulsory for me to terminate the sub – brokership
It is not compulsory for the applicant to cancel the sub – brokership while applying for Trading
Membership at BSE Ltd. Please note that the sub – brokership will have to be cancelled before
commencement of business and the Trading Member will have to give an undertaking before the
documents are forwarded to SEBI that he will not commence business until cancellation of sub –
brokership.

• Can my deposits at NSE be shown in the net worth statement to be submitted to BSE Ltd.?
Yes the deposits at NSE can be taken for the purpose of calculating net worth statement for BSE
Ltd.

• Is it compulsory to have an office in Mumbai?

No it is not mandated to have an office in Mumbai. The mandation was removed vide notice
number Notice no: 20021023-4 dated Wednesday, October 23, 2002.

• Who can apply for Deposit Based Membership?

Corporates and Individuals can only apply for Deposit Based Memberships.

• Can Partnership firm apply for membership?

Currently, Partnership firms are not allowed to apply for BSE membership. However, one can
explore the option of applying as an individual/sole proprietorship firm. Thereafter, one can convert
that membership to the partnership firm.

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• What is the total cost for obtaining the Trading Membership Right at BSE Ltd.?

Sr. No Particulars Amount

1 Deposit for DBM Membership
• Initial Payment Rs, 1,00,000/- (Cash)
• Balance Payment Rs. 9,00,000/- (Cash)
2 Base Minimum Capital Rs.1,25,000/- (Cash)
Rs. 8,75,000/-
(Cash/BG/FDR)
3 Trade Guarantee Fund Rs.10,00,000/-
(Cash/BG/FDR)
4 Admission Fees Rs.5,000/- (Cash)
5 Annual Subscription Rs.25,000/- (Cash)
6 Initial contribution towards Trade Rs. 10,000/- (Cash)
Guarantee Fund
Please note monies specified in points 4, 5 & 6 are non-refundable monies and exclusive of
service tax.
* Admission fees would be Rs 5,000/- if applicant applies for both the segments: Equity and
Derivatives else in case the applicant applies only for equity membership then admission fees will be
Rs 2,50,000/-

• Do we provide exposure on the Deposit?

Yes, Exposure is provided on 10 Lacs deposit and TGF of 10 lacs

• Is there any lock-in period on the deposit?

No, there is no lock–in period on the deposit.

• Process for surrender of Membership (Refund of deposit)?

Any trading member who wants refund of Interest Free Deposit of Rs.10 lacs shall be first required
to apply for surrender of trading membership right. Before applying for surrender of trading
membership right, such member shall ensure voluntary closure of business. The voluntary closure
should be at least for a period of 6 months prior to the date of surrender. Where the trading terminals
of the member have remained deactivated for a period of 6 months prior to the date of surrender it
shall be construed as closure of business. On receipt of application for surrender, the Exchange will
give Public Notice in newspaper to enable the investors /public to lodge claims, if any, against
surrendering trading member, giving a period of 3(three months) from the date of Public Notice.
However, this condition would not apply to the members who have not commenced business or
have not activated their trading terminals at all. Further, the amount of Interest Free Deposit will be
refunded only after recovering outstanding amount if any by BSE and after getting NOC from SEBI.

• What portion of the total deposit to be included in the Networth?

Deposit of Rs. 10 Lacs can be included in the Networth.

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Member / Institutional Sales Department
Bombay Stock Exchange Ltd.
15th floor, P.J. Towers, Dalal Street,
Mumbai 400 001
Tel: +91‐22‐2272 1233/ 34
Fax: +91‐22‐22723001

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