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KOLKATA, July 8

THE Securities and Exchange Board of India has advised exchanges to ensure that stockbrokers who seek critical approvals fully pay their outstanding principal and interest.

Brokers who apply for registration in the derivatives segment or as sub-brokers are, among others, covered by the SEBI circular, which reiterates that the facility of 50 per cent payment of the principal fees has been withdrawn. The securities regulator had in January 2003 made it clear that the part-payment facility would not be available after March 31.

More recently, however, it advised exchanges to make sure that brokers have paid at least 50 per cent of the principal dues in the cash segment and submitted undertakings to pay the balance fees (with interest) within a period of two years. This is necessary for those who apply for such registrations as in the derivatives segment.

"Applications in respect of the brokers who have complied with the 50 per cent facility may be forwarded during the undertaking period after ensuring that he has paid full fees along with interest in respect of all erstwhile entities, if any, the shortfall in 50 per cent, if any, and fresh accruals in fees from the date of undertaking'', SEBI has maintained.

CSE on codes for FIIs, MFs

THE Calcutta Stock Exchange has asked its members to comply with the recent SEBI directive on unique client codes for FIIs and MFs.

In a recent communication to members, the exchange has referred to a regulatory requirement, pertaining to all funds (for each of their schemes) and FIIs (for each sub-account), pertaining to the issue of such codes by the exchange.

Its directive on the matter is aimed at protecting the interests of investors and to promote the securities market, SEBI has stated while pointing to the activity schedule for implementing the T+2 rolling settlement.

Following a meeting (to take stock of the preparedness of the bourses for T+2) between Reserve Bank of India, the exchanges, depositories and market participants, it was decided that the bourses would generate a unique code for MFs and FIIs.

This would require the exchange authorities to set up the right systems and modify their software. Also, they would be required to implement the process within three months.

"Till such time, the present practice of putting client IDs at the time of order entry in case of FIIs and MFs shall continue," the regulator has observed. It further advised the exchanges to amend their bye-laws, rules and regulations in order to implement the policy.

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