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RNI No. MAHBIL/2009/35827
2
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
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ÊVɱ½þÉ {ÉÊ®ú¹Énù, ªÉ´ÉiɨÉɳý
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ªÉ´ÉiɨÉɳý ÊVɱ½þÉ {ÉÊ®ú¹ÉnäùSÉÉ ´É ÊiÉSªÉÉ EòɪÉÇIÉäjÉÉiÉÒ±É {ÉÆSÉɪÉiÉ ºÉʨÉiªÉÉÆSÉÉ (BEòÊjÉiÉ) ºÉxÉ 2017-2018 SÉÉ ´ÉÉ̹ÉEò |ɶÉɺÉxÉ +½þ´ÉɱÉ,
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ÊnùxÉÉÆEò 23 VÉÉxÉä´ÉÉ®úÒ 2019.
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3
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
Serial No. M-18255
Notice
BAYER CROPSCIENCE LTD.
Bayer House, Central Avenue, Hiranandani Estate, Thane (West) 400 607.
Notice is hereby given that the certificate for the undermentioned securities of the Company has been
lost and the holders of the said securities has applied to the Company to issue duplicate certificate.
Any person who has a claim in respect of the said securities should lodge such claim with the Company
at its Registered Office within 15 days from this date, else the Company will proceed to issue duplicate
certificate without further intimation.
Name of Holder
Kind of Securities
No. of Securities
Distinctive Number
and face value
UMAYAMBIKAI
Physical share
66
16758138-16758203
FINANCIAL SERVICES
certificate of Equity
PVT. LTD.
shares of face value
Rs. 10 each.
Place : No. 4, Lady Desika Road, Mylapore, Chennai.
Date : 21-1-2019.
UMAYAMBIKAI FINANCIAL SERVICES PVT. LTD.
¦ÉÉMÉ nùÉäxÉú (ºÉÆEòÒhÉÇ)---1+
4
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
Serial No. M-18256
Notice
BENARES HOTELS LTD.
Regd. Office : Indian Hotels Company Ltd., Mandlik House, Mandlik Road, Mumbai 400 001 Maharashtra
Notice is hereby given that the share certificates No(s.) for the undermentioned securities of the
Company has/have been lost/mislaid and the holder(s) of the said securities has/have applied to the
Company to issue duplicate certificate(s). Any person who has a claim in respect of the said securities
should lodge such claims with Company at its Registered Office, within 15 days from this date else the
Company will proceed to issue duplicate certificate(s) without further intimation.
Name of Holders/
Kind of Securities
No. of
Distinctive Number(s)
Jt. Holders if any Late.
and face value
Securities
MR. HIRJI NAGJI
EQUITY
25
566051-566075
DEDHIA
MR. BHARAT H.
10 F.V
DEDHIA
PLACE : MUMBAI,
Name(s) of the Applicant
Date : 2/2/2019.
MR. BHARAT H. DEDHIA.
5
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
Serial No. M-18257
Notice
CEAT LIMITED
Regd. Off. : 463, Dr. Annie Besant Road, Worli, Mumbai 400 030.
Notice is hereby given that the certificate for the undermentioned securities of the Company has/
have been lost/mislaid and the holder of the said securities has applied to the Company to issue duplicate
certificate(s).
Any person who has a claim in respect of the said securities should lodge such claim with the Company
at its Registered Office within 15 days from this date, else the Company will proceed to issue duplicate
certificate without further intimation.
Name of Holder
Kind of Security
No. of Shares
Distinctive Numbers
and face value
IYER P. VAIDYANATHAN
Share Certificate Face
78
4218926-4219003
Value of Rs. 10 per
Share.
Place : Chennai,
IYER P VAIDYANATHAN
Date : 25th January 2019.
(Name of Holder).
6
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
Serial No. M-18258
Notice
THE TATA POWER COMPANY LIMITED
Regd. Off.—Bombay House, 24, Homi Mody Street, Fort, Mumbai, Maharashtra, 400 001
Notice is hereby given that the certificate[s] for the under mentioned securities of the Company have
been lost and the holder[s] of the said securities/applicant [s] have applied to the Company to issue duplicate
certificate [s].
Any person who has a claim in respect of the said securities should lodge such claim with the Company
at its Registered Office within 15 days from this date, else the Company will proceed to issue duplicate
certificate [s] without further intimation.
Name[s] of holder[s]
Kind of Securities
No. of Securities
Distinctive Number[s]
and Jt. holder[s], if any
and face value
Premindra Kumar Sahni
Shares
1600
17991091-17992690
Sartaj Kumar Sahni
Face Value Rs. 1
2100
17988491-17990590
Place : New Delhi,
PREMINDRA KUMAR SAHNI,
Date : 2nd February 2019.
(Name of Holder).
7
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ªÉÉÆSÉä Eò±É¨É 50 +(2) xÉÖºÉÉ®ú EòɪÉÉDZɪÉÒxÉ ®úÉVÉ{ÉjÉÉiÉ ½þÒ xÉÉä]õÒºÉ |ÉʺÉrù Eò®úhªÉÉSÉÉ ÊnùxÉÉÆEò 14 +ÉìMɺ]õ 2018 ®úÉäVÉÒSªÉÉ +Énäù¶ÉÉxÉÖºÉÉ®ú ½þÒ
xÉÉä]õÒºÉ +ÉVÉ ÊnùxÉÉÆEò 1 Êb÷ºÉå¤É®ú 2018 ®úÉäVÉÒ ¨ÉÉZªÉÉ ºÉ½þÒÊxɶÉÒ ´É ºÉ½þɪªÉEò vɨÉÉÇnùÉªÉ +ɪÉÖCiÉ, ¤ÉÖ±Éb÷ÉhÉÉ ªÉÉÆSªÉÉ Ê¶ÉCCªÉÉÊxɶÉÒ Ênù±ÉÒ.
®úÉVÉäxpù ¶ÉÆEò®ú EòÉxÉbä÷,
ºÉ½þɪªÉEò vɨÉÉÇnùÉªÉ +ɪÉÖCiÉ,
¤ÉÖ±Éb÷ÉhÉÉ Ê´É¦ÉÉMÉ, ¤ÉÖ±Éb÷ÉhÉÉ.
The proposed Rules for Commodity Derivatives Segment of METROPOLITAN CLEARING CORPORATION OF
INDIA LIMITED (MCCIL) were published in the Gazette of India in Part-IV, September 15 - September 21, 2018 for
inviting public comments. Pursuant thereto, the Securities and Exchange Board of India (SEBI), has vide its letter no.
SEBI/HO/CDMRD/DRMP/OW/P/2019/1155/1 dated January 10, 2019 conveyed its approval to the Rules for
Commodity Derivatives Segment of Metropolitan Clearing Corporation of India Limited as under.
RULES OF METROPOLITAN CLEARING CORPORATION OF INDIA LIMITED (COMMODITY
DERIVATIVES SEGMENT)
CHAPTER I
DEFINITIONS
1.
BOARD
“Board” means Board of Directors of Metropolitan Clearing Corporation of India Limited.
2.
BYE LAWS
Unless the context indicates otherwise, “Bye Laws” means the Bye Laws of the Metropolitan Clearing
Corporation of India Limited for the time being in force.
3.
CLEARING BANK(S)
“Clearing Bank(s)” is such bank(s) as the Clearing Corporation may appoint to act as a funds settling agency, for
the collection of margin money for all deals cleared through the Clearing Corporation and any other funds
movement between Clearing Members and the Clearing Corporation and between Clearing Members as may be
directed by the Clearing Corporation from time to time.
4.
CLEARING CORPORATION
“Clearing Corporation” means Metropolitan Clearing Corporation of India Limited.
5.
CLEARING MEMBER
“Clearing Member” means a member of the Clearing Corporation and includes all categories of Clearing
Members as may be admitted as such by the Clearing Corporation but does not denote the shareholder of the
Clearing Corporation.
6.
CLEARING SEGMENTS
“Clearing Segments” means the different segments or divisions for clearing and settlement of deals as may be
classified by the relevant authority from time to time.
7.
COMMODITY DERIVATIVE
“Commodity Derivative” means “commodity derivative” as defined under Section 2(bc) of the Securities
Contract (Regulation) Act, 1956 as amended from time to time and includes such other contract as may be
permitted by SEBI to trade under “commodity derivative segment”.
8.
DEALS
“Deals” means, unless the context indicates otherwise, deals which are admitted to be cleared and settled through
the Clearing Corporation.
9.
REGULATIONS
“Regulations” means Regulations of the Clearing Corporation for the time being in force and includes business
rules, code of conduct and such other procedures and regulations, circulars, directives and orders as issued by the
relevant authority from time to time for the operations of the Clearing Corporation.
10.
RELEVANT AUTHORITY
“Relevant Authority” means the Board or such other authority as specified by the Board from time to time as
relevant for a specified purpose.
11.
SETTLEMENT GUARANTEE FUND
“Settlement Guarantee Fund” means a fund established and maintained in accordance with the relevant
provisions of the Bye Laws.
12.
TRADING MEMBER
“Trading Member” means any person admitted as a member in any Stock Exchange in accordance with the
Rules, Bye Laws and Regulations of that Exchange.
Note: The terms defined above shall mean the same when used in lower case in the Bye Laws and Regulations, unless the
context indicates otherwise.
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
9
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-2
Sr. No. M-18253
CHAPTER II
BOARD
1.
The Board is empowered to organise, maintain, control, manage, regulate and facilitate the operations of the
Clearing Corporation and all activities of the Clearing Members of the Clearing Corporation.
2.
The Board is empowered to make Rules, Bye Laws and Regulations from time to time, for all or any matters
relating to the conduct of business of the Clearing Corporation, the business and transactions of Clearing
Members, between Clearing Members inter-se as well as the business and transactions between Clearing
Members and persons who are not Clearing Members, and to control, define and regulate all such transactions
and dealings and to do such acts and things which are necessary for the purposes of the Clearing Corporation.
3.
Without prejudice to the generality of the foregoing, the Board is empowered to make Regulations for all or any
of the following matters:
(1)
conduct of business of the Clearing Corporation;
(2)
appointment and dissolution of Committee or Committees for any purpose of the Clearing Corporation;
(3)
manner of operations and interfacing with exchanges, custodians, depository, Warehouses and
Warehouse Service Providers, clearing bank(s) and such other service providers that the Clearing
Corporation may appoint or deal with for the purpose of accomplishing its functions as a Clearing
Corporation in relation to deals executed by Trading Members on the Trading Platform of Concerned
Exchanges;
(4)
determine different categories of Clearing Members that may be admitted to the Membership of the
Clearing Corporation;
(5)
norms, procedures, terms and conditions for admission to membership of the Clearing Corporation;
(6)
conditions, levy for admission or subscription for admission or continuance of Clearing Membership of
the Clearing Corporation;
(7)
conduct of Clearing Members with regard to the business of the Clearing Corporation;
(8)
prescription, from time to time, of capital adequacy and other norms which shall be required to be
maintained by different categories of Clearing Members;
(9)
charges payable by Clearing Members for business transacted through the different clearing segments
of the Clearing Corporation as may be laid down from time to time;
(10)
maintenance of records and books of accounts by Clearing Members as may be specified from time to
time;
(11)
investigation of the financial condition, business conduct and dealings of the Clearing Members;
(12)
prescription from time to time, and administration of penalties, fines and other consequences, including
suspension/expulsion of Clearing Members from the different Clearing segments of the Clearing
Corporation for violation of any requirements of the Rules, Bye Laws and Regulations and the codes of
conduct;
(13)
disciplinary action/procedures against any Clearing Member;
(14)
penalties for non compliance with or contravention of the Bye Laws, Rules and Regulations of the
different Clearing Segments of the Clearing Corporation or of general discipline of the Clearing
Corporation, including expulsion or suspension of the Clearing Members;
(15)
declaration of any Clearing Member as a defaulter or suspension or resignation or expulsion from
Clearing Membership of the Clearing Corporation and consequences thereof;
(16)
Norms relating to surrender, resignation or withdrawal from the Membership from one or more of the
Clearing Segments or of the Clearing Corporation itself and norms for re-admission of a Member.
(17)
Norms relating to restrictions that may be required to be placed on the Clearing and Settlement activities
of a Clearing Member and those relating for withdrawing such restrictions so placed.
(18)
Norms for accreditation of Warehouses and Warehousing Sevice Providers (also referred to as the
WSP) relating to financial status, governance of the WSP, physical facilities and infrastructure at the
sites, existence of internal audit and supervision of its activities, insurance cover that is available to the
WSP.
(19)
such other matters in relation to the Clearing Corporation as may be prescribed under the provisions of
the Articles of Association, Bye Laws or these Rules or as may be necessary or expedient for the
organisation, maintenance, control, management, regulation and facilitation of the operations of the
Clearing Corporation.
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
10
4.
The Board is empowered to delegate, from time to time, to Executive Committee(s) or any other committee(s) or
to the Managing Director or to any person, such of the powers vested in them and on such terms as they may
think fit, to manage all or any of the affairs of the Clearing Corporation and from time to time, to revoke,
withdraw, alter or vary all or any of such powers.
5.
The Board may, from time to time, constitute one or more committees comprising of members of the Board or
such others as the Board may in its discretion deem fit or necessary and delegate to such committees such powers
as the Board may deem fit and the Board may from time to time revoke such delegation.
6.
The Board shall have the authority to issue directives from time to time to the Executive Committee or any other
Committees or any other person or persons to whom any powers have been delegated by the Board. Such
directives issued in exercise of this power, which may be of policy nature or may include directives to dispose
off a particular matter or issue, shall be binding on the concerned Committee(s) or person(s).
7.
The Board is empowered to vary, amend, repeal or add to Bye Laws, Rules and Regulations of the Clearing
Corporation framed by it.
8.
The Members of the Board and of such committees as may be identified by the Board shall adhere to the Code of
Conduct as may be prescribed by the Board from time to time.
CHAPTER III
EXECUTIVE COMMITTEE
1.
CONSTITUTION
One or more Executive Committee(s) may be appointed by the Board for the purposes of managing the day to
day affairs of the different segment(s) of the Clearing Corporation. The Board may decide on the constitution,
duration and powers of the Executive Committee(s), nomination and vacation of the nominees from the
Executive Committee(s) and appointment of office bearers and rules and procedures for the functioning of the
Executive Committee(s).
2.
POWERS OF EXECUTIVE COMMITTEE
(1)
The Board may delegate from time to time to the Executive Committee(s) such of the powers vested in
them and upon such terms as they may think fit, to manage all or any of the affairs of the Clearing
Corporation and from time to time, to revoke, withdraw, alter or vary all or any of such powers.
(2)
The Executive Committee(s) shall be bound and obliged to carry out and implement any directives
issued by the Board from time to time and shall be bound to comply with all conditions of delegation
and limitations on the powers of the Executive Committee(s) as may be prescribed.
CHAPTER IV
CLEARING MEMBERSHIP
1.
MULTIPLE CATEGORIES
The rights, privileges duties and responsibilities of a Clearing Member shall be subject to and in accordance with
the Rules, Bye Laws and Regulations of the Clearing Corporation. The relevant authority may define and admit
more than one category of Clearing Member for the same segment or for different segments and may specify
different norms including eligibility, admission and cessation of membership for each type of Clearing Members.
2.
ADMISSION AND FEES
(1)
The relevant authority may specify different categories of Clearing Members and requirements
regarding qualification, networth, infrastructure and other relevant norms for each such category.
(2)
The relevant authority may specify pre-requisites, conditions, formats and procedures for application for
admission, termination, re-admission, etc. of Clearing Members to all or any of the segments of the
Clearing Corporation. The relevant authority may, at its absolute discretion, refuse permission to any
applicant to be admitted as Clearing Member to all or any of the segments.
(3)
Such fees, security deposit, contribution and other money as are specified by the relevant authority
would be payable on or before admission as Clearing Member and for continued appointment thereof.
3.
ELIGIBILITY
(1)
The following persons shall be eligible to become Clearing Members of the Clearing Corporation:
(a)
Individuals;
(b)
Registered Firms;
(c)
Bodies corporate; and
(d)
Companies as defined in the Companies Act, 1956/2013
(e)
any other entity as permitted by SEBI
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
11
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-2+
(2)
No person shall be admitted as a Clearing Member of the Clearing Corporation if such proposed
member:
(a)
is an individual who has not completed 21 years of age;
(b)
has been adjudged bankrupt or a receiving order in bankruptcy has been made against the
person or the person has been proved to be insolvent even though he has obtained his final
discharge;
(c)
has compounded with his creditors for less than full discharge of debts;
(d)
has been convicted of an offence involving a fraud or dishonesty;
(e)
is a body corporate which has committed any act which renders it liable to be wound up under
the provisions of the law;
(f)
is a body corporate which has had a provisional liquidator or receiver or official liquidator
appointed to the person;
(g)
has been at any time expelled or declared a defaulter by any other stock exchange or clearing
corporation;
(h)
has been previously refused admission to Clearing Membership of the Clearing Corporation
unless the period of one year has elapsed since the date of rejection
4.
ADDITIONAL ELIGIBILITY CRITERIA
No person shall be eligible to be admitted to the Clearing Membership of the Clearing Corporation unless the
person satisfies such additional eligibility criteria as the Board or relevant authority may prescribe from time to
time for different classes of Clearing Members and clearing segments;
Provided however that the relevant authority may waive compliance with any or all of the admission conditions
and at its discretion waive the requirements set out as above, if it is of the opinion that the person seeking
admission is considered by the relevant authority to be otherwise qualified to be admitted as a Clearing Member
by reason of his means, position, integrity, knowledge and experience of business in securities.
5.
ADMISSION
(1)
Any person desirous of becoming a Clearing Member shall apply to the Clearing Corporation for
admission to the Clearing Membership of the relevant segment of the Clearing Corporation. Every
application shall be dealt with by the relevant authority who shall be entitled to admit or reject such
applications at its discretion.
(2)
The application for admission of Clearing Members to each segment shall be made in such formats as
may be specified by the relevant authority from time to time.
(3)
The application shall have to be submitted along with such fees, security deposit and other monies in
such form and in such manner as may be specified by the relevant authority from time to time.
(4)
The applicant shall have to furnish such declarations, undertakings, certificates, confirmations and such
other documents or papers as may be specified from time to time by the relevant authority.
(5)
The relevant authority shall have the right to call upon the applicant to pay such fees or deposit such
additional security in cash or kind, deposit or contribution to Settlement Guarantee Fund and any other
fund that may be maintained by the Clearing Corporation from time to time, to furnish any additional
guarantee or to require contribution to computerisation fund, training fund or fee as the relevant
authority may prescribe from time to time.
(6)
The relevant authority may provisionally admit the applicant to Clearing Membership provided that the
applicant satisfies the eligibility conditions and other procedures and requirements of application subject
to such terms and conditions as may be specified by the relevant authority. Upon the relevant authority
being satisfied that all other terms and conditions and other requirements for the Clearing Membership
have been complied with, the applicant may be admitted as a Clearing Member. The granting of
provisional membership shall not entitle the applicant to any privileges and rights of Clearing
Membership.
(7)
The relevant authority may at its absolute discretion reject any application for admission without
communicating the reason thereof.
(8)
If for any reason the application is rejected, the application fee or admission fee if any as the case may
be or part thereof as may be decided by the relevant authority may at its discretion be refunded to the
applicant, without any interest.
(9)
The relevant authority may at any time from the date of admission to the Clearing Membership of the
Clearing Corporation withdraw the admission and expel a Clearing Member if he has in or at the time of
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
12
his application for admission to membership or during the course of the inquiry made by the relevant
authority preceding his admission :-
(a)
made any wilful misrepresentation; or
(b)
suppressed any material information required of him as to his character and antecedents; or
(c)
has directly or indirectly given false particulars or information or made a false declaration.
(10)
(a)
The membership admission does not confer any ownership right as a member of the Clearing
Corporation and shall not be transferable or transmittable except as herein mentioned.
(b)
Subject to such terms and conditions as the relevant authority may prescribe from time to time
and to the prior written approval of the relevant authority, transfer of the Clearing Membership,
may be effected as follows:
(i)
by making nomination under these Rules;
(ii)
by an amalgamation or merger of a Clearing Member company;
(iii)
by takeover of a Clearing Member company;
(iv)
by transfer of the Clearing Membership of a Clearing Member firm to a new firm, in
which, all the existing partners are not partners; and
(v)
by two or more Clearing Members / Clearing Member firms coming together to form
a new partnership firm/company.
(c)
A Clearing Member or his successor(s) may make a nomination to Clearing Membership. The
nomination(s) made by a Clearing Member or successor(s) of a Clearing Member shall be
subject to the following conditions, namely:
(i)
The nominee(s) shall, at the time when the nomination becomes effective, be
person(s) who shall be qualified to be admitted as Clearing Member(s) of the Clearing
Corporation;
(ii)
The nominee(s) shall give to the relevant authority his/their unconditional and
irrevocable acceptance of his/their nomination;
(iii)
A Clearing Member shall nominate one or more of his successor(s) as per the
applicable succession laws. If the Clearing Member has no successor(s) willing to
carry on the Clearing Membership, then the Clearing Member may nominate
person(s) other than his successor(s);
(iv)
If the Clearing Member has not nominated any person and is rendered incompetent to
carry on his business on the Clearing Corporation on account of physical disability,
then the Clearing Member may, within a period of six months, make a nomination as
per the provisions of sub-clause (iii) above;
(v)
If the Clearing member has not nominated any person, the successor(s) of the
Clearing Member may nominate one or more persons from among themselves within
six months from the date of the death of the Clearing Member;
(vi)
If the nomination of the Clearing Member is such that it cannot be given effect to by
the relevant authority, at the time when the nomination would have become effective,
then the successor(s) of such a Clearing Member may nominate any other person(s)
within six months from the date on which the nomination would have become
effective;
(vii)
If more than one person(s) are nominated by the Clearing Member or the successor(s),
then such nominated person(s) shall be required to form a company to carry on the
Clearing Membership;
(viii)
A nomination made by a Clearing Member or successor(s) may be revoked with the
prior written approval of the relevant authority and subject to such terms and
conditions as the relevant authority may prescribe from time to time. No such
revocation shall be permitted after the nomination becomes effective; and
(ix)
The nomination shall become effective in the case of a nomination made by a
Clearing Member, from the date of his death or physical disability or from the date of
approval by the relevant authority, whichever is later and in the case of a nomination
made by successor(s), from the date on which such nomination is made or from the
date of approval by the relevant authority, whichever is later.
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
13
(d)
The relevant authority may permit the transfer of Clearing Membership in the following
circumstances:-
(i)
death of a Clearing Member;
(ii)
if in the opinion of the relevant authority, the Clearing Member is rendered
incompetent to carry on his business on the Clearing Corporation on account of
physical disability;
(iii)
upon amalgamation or merger of a Clearing Member company;
(iv)
upon takeover of a Clearing Member company; and
(v)
upon the death of or resignation or notice of dissolution by a partner of a Clearing
Member firm, and re-alignment, if any, by the partners in such firm or by the partners
in such firm and the nominee(s)/successor(s) of the outgoing partner or by the partners
in such firm and person(s) other than the nominee(s)/successor(s) of the outgoing
partner in a new firm, within a period of six months from the date of such death or
resignation or notice of dissolution.
(e)
The relevant authority may, while permitting the transfer, prescribe from time to time such
transfer fee as it deems fit in the following circumstances, viz,
(i)
nomination by a Clearing Member of a person other than successor(s) under the
applicable laws;
(ii)
nomination by the successor(s) of a Clearing Member, if the nominee(s) is/are not
from amongst the successors;
(iii)
amalgamation or merger of a Clearing Member company with a non Clearing
Member company resulting in the loss of majority shareholding and/or control of
management by the majority shareholders of the Clearing Member company;
(iv)
takeover of the Clearing Member company by non Clearing Member(s) resulting in
the loss of majority shareholding and/or control of management by the majority
shareholders of the Clearing Member company; and
(v)
in the case of sub-clause (v) of clause (d), if the person(s) other than the
nominee(s)/successor(s) of the outgoing partner hold at least 51% of share in the
capital of the new firm.
Explanation I
For the purpose of sub-clauses (iii) and (iv) above, the term "loss of majority
shareholding" means a shareholder or a group of shareholders holding 51% or more
shares / interest in the Clearing Member company ceases to hold 51% of shares /
interest in the Clearing Member company or in the amalgamated company which shall
take up Clearing Membership upon amalgamation of the Clearing Member company
with a Non Clearing Member company.
Explanation II
For the purpose of sub-clauses (iii) and (iv) above, the term "loss of control in
management" means the loss of the right to appoint majority of the directors or to
control the management or policy decision exercisable by person or persons acting
individually or in concert, directly or indirectly including by virtue of their
shareholding or management rights or shareholders agreements or voting agreements
or in any other manner.
(f)
For the purpose of the clauses (b) to (e), the term 'Clearing Member' shall to the extent
applicable include a partner of a Clearing Member firm or a shareholder of a Clearing Member
company. The term successor(s) shall to the extent applicable, includes successor(s) of a
partner of a Clearing Member firm or successor(s) of a shareholder of a Clearing Member
company.
(g)
Without prejudice to any other provision of the Rules, the Clearing Membership may be
suspended, for such period as the relevant authority may deem fit, in the following
circumstances:
(i)
upon the individual Clearing Member or a partner of a Clearing Member firm or a
shareholder of a Clearing Member company, in the opinion of the relevant authority,
being rendered incompetent to carry on his business on account of physical disability;
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
14
(ii)
upon the mental disability of the individual Clearing Member or a partner of a
Clearing Member firm provided the partner holds at least 51% of share in the profits
& losses of and/or at least 51% of share in the capital of such firm or a shareholder of
a Clearing Member company provided the shareholder is a majority shareholder in
such Clearing Member company;
(iii)
upon the death of an individual Clearing Member or a partner of a Clearing Member
firm provided the partner holds at least 51% of share in the profits & losses of and/or
at least 51% of share in the capital of such firm or a shareholder of a Clearing
Member company, provided the shareholder is a majority shareholder in such
Clearing Member company and during the six month period within which
successor(s) of such individual Clearing Member partner or shareholder, may
nominate person(s) to take up the stake/shares of such deceased individual Clearing
Member or partner or shareholder;
(iv)
upon the dissolution of a Clearing Member firm and during the six month period as
referred to in sub clause (v) of clause (d) ; and
(v)
upon any deadlock in the management of a Clearing Member firm or Clearing
Member company, which, in the opinion of the relevant authority will affect the
ability of such Clearing Member firm or Clearing Member company to carry on its
business. The Clearing Member shall be entitled for an opportunity for representation
before the relevant authority, before being suspended under this sub-clause, but the
decision of the relevant authority shall be final.
Explanation I
For the purposes of this sub-clause, the term "Deadlock in the Management" means a
situation wherein there is a loss of confidence or disagreement among the partners of
a Clearing Member firm or among the directors/shareholders of a Clearing Member
company, which, in the opinion of the relevant authority, will affect or is likely to
affect the conduct of business by the Clearing Member firm or Clearing Member
company, as the case may be or an equality of vote at a meeting of the directors or
shareholders of a Clearing Member company.
(h)
Without prejudice to any other provision of the Rules, the Clearing Membership may be
terminated by the relevant authority if an acceptable nomination or realignment, as the case
may be, does not take place to the satisfaction of the relevant authority, within the said period
of six months.
(i)
The nominee(s), successor(s), partners of a Clearing Member firm or such other persons, as the
case may be shall be entitled for an opportunity for representation before the relevant authority,
before being terminated under clause (h) above, but the decision of the relevant authority shall
be final.
Conversion of legal status of the Clearing Member
(j)
Subject to such terms and conditions as the relevant authority may prescribe from time to time
and to the prior written approval of the relevant authority, conversion of the legal status of a
Clearing Member may be effected as follows:
(i)
by conversion of an individual Clearing Member into a partnership firm/company.
(ii)
by conversion of a Clearing Member firm into a company.
(k)
The relevant authority may permit the conversion of the legal status of the Clearing Member in
the following circumstances:
(i)
In the case of sub-clause (i) of clause (j), if the individual Clearing Member holds and
continues to hold atleast 51% of the share in the profits/losses and/or atleast 51% of
share in the capital of the partnership firm, or atleast 51% of shareholding / interest in
the company, which shall take up the Clearing membership of the Clearing
Corporation.
(ii)
In the case of sub-clause (ii) of clause (j), if the partners holding atleast 51% of share
in the profits / losses and / or atleast 51% of share in the capital of the Clearing
Member firm hold and continue to hold atleast 51% of shareholding / interest in the
company which shall take up the Clearing Membership of the Clearing Corporation.
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
15
(11)
Notwithstanding anything contained in Rule 5(10), the relevant authority may, in its absolute discretion
permit the transfer of the Clearing Membership to another person or entity, subject to such terms and
conditions as the relevant authority may in its absolute discretion prescribe from time to time.
(12)
A Clearing Member shall not assign, mortgage, pledge, hypothecate or charge his right of membership
or any rights or privileges attached thereto nor shall he has the right to give license or grant power of
attorney in respect of such rights and privileges and no such attempted assignment, mortgage, pledge,
hypothecation or charge or license or power of attorney shall be effective as against the Clearing
Corporation for any purpose, nor shall any right or interest in any Clearing Membership other than the
personal right or interest of the Clearing Member therein be recognised by the Clearing Corporation.
The relevant authority may suspend any Clearing Member of the Clearing Corporation who acts or
attempts to act in violation of the provisions of this rule or take any other disciplinary action as it may
deem fit.
6.
CONDITIONS
(1)
Clearing Members shall adhere to the Rules, Bye Laws and Regulations of the Clearing Corporation and
shall comply with such operational parameters, rulings, notices, guidelines and instructions of the
relevant authority as may be applicable.
(2)
All contracts issued for admitted deals shall be in accordance with and subject to Rules, Bye Laws and
Regulations of the Clearing Corporation.
(3)
Clearing Members shall furnish declarations, undertakings, confirmation and such other documents and
papers relating to such matters and in such forms as may be prescribed by the relevant authority from
time to time.
(4)
Clearing Members shall furnish to the Clearing Corporation within such time as may be prescribed an
annual Auditors' Certificate certifying that specified requirements as may be prescribed by the relevant
authority from time to time pertaining to their operations have been complied with.
(5)
Clearing Members shall furnish such information and periodic returns pertaining to their operations as
may be required by the relevant authority from time to time.
(6)
Clearing Members shall furnish to the Clearing Corporation such audited and/or unaudited financial or
qualitative information and statements and in such manner as may be required by the relevant authority
from time to time.
(7)
Clearing Members shall comply with such requirements as may be prescribed by the relevant authority
from time to time with regard to advertisements, booklets and issue of circulars in connection with their
activities as Clearing Members.
(8)
Clearing Members shall extend full cooperation and furnish such information and explanation and in
such manner as may be required by the relevant authority or authorised person of the Clearing
Corporation for inspection or audit or in regard to any dealings, settlement, accounting and/or other
related matters.
7.
PARTNERSHIPS
(1)
No Clearing Member shall form a partnership or admit a new partner to an existing partnership or make
any change in the name of an existing partnership without intimation and prior approval of the relevant
authority in such form and manner and subject to such requirements as the relevant authority may
specify from to time; these requirements may, inter alia, include deposits, declarations, guarantees and
other conditions to be met by and which may be binding on all partners.
(2)
No Clearing Member shall, at the same time, be a partner in more than one partnership firm which is a
Clearing Member of the Clearing Corporation.
(3)
No Clearing Member who is a partner in any partnership firm shall assign or in any way encumber his
interest in such partnership firm.
(4)
The partnership firm shall register with such authorities as may be required under relevant laws and
shall produce proof of such registration to the Clearing Corporation.
(5)
The partners of the firm shall do business only on account of the firm and jointly in the name of the
partnership firm. No single partner or group of partners are entitled to any rights and privileges of
Clearing Membership independent from that of their partnership firm.
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
16
(6)
The partners of the partnership firm must communicate to the Clearing Corporation in writing under the
signatures of all the partners or surviving partners any change in such partnership either by dissolution
or retirement or death of any partner or partners.
(7)
Any notice to the Clearing Corporation intimating dissolution of a partnership shall contain a statement
as to who undertakes the responsibility of settling all outstanding contracts and liabilities of the
dissolved partnership firm but that shall not be deemed to absolve the other partner or partners of his or
their responsibility for such outstanding contracts and liabilities.
8.
TERMINATION OF MEMBERSHIP
(1)
Any Clearing Member may cease to be a member, if one or more apply:
(a)
by resignation;
(b)
by death;
(c)
by expulsion in accordance with the provisions contained in the Bye Laws, Rules and
regulations;
(d)
by being declared a defaulter in accordance with the Bye Laws, Rules and Regulations of the
Clearing Corporation;
(e)
by dissolution in case of partnership firm;
(f)
by winding up or dissolution in the case of a limited company;
(2)
Notwithstanding anything contained in the Byelaws and Rules of Clearing Corporation, a clearing member shall
ipso facto cease to be clearing member of the Clearing Corporation, on cessation of his membership/ trading
membership on one or more stock exchanges in accordance with the provisions contained in the Byelaws, Rules
and Regulations of such stock exchange(s) and in such cases, such clearing member shall not be entitled for any
opportunity of being heard or explanation in such an event.
(3)
The termination of Clearing Membership shall not in any way absolve the Clearing Member from any
obligations and liabilities incurred by the Clearing Member prior to such termination.
9.
RESIGNATION
(1)
A Clearing Member who intends to resign from the Clearing Membership of the Clearing Corporation
shall intimate to the Clearing Corporation a written notice to that effect.
(2)
Any Clearing Member of the Clearing Corporation objecting to any such resignation shall communicate
the grounds of his objection to the relevant authority by letter within such period as may be specified by
the relevant authority from time to time.
(3)
The relevant authority may accept the resignation of a Clearing Member either unconditionally or on
such conditions as it may think fit or may refuse to accept such resignation and in particular may refuse
to accept such resignation until it is satisfied that all outstanding transactions with such Clearing
Member have been settled.
10.
DEATH
(1)
On death of a Clearing Member, his legal representatives and authorised representatives, if any, shall
communicate due intimation thereof to the relevant authority in writing immediately and all future
activities of the Clearing Member shall cease immediately except so far as it pertains to past obligations
prior to his death.
(2)
On the termination of membership of a Clearing Member on his death, security deposits, other monies,
any additional deposits, whether in the form of cash, bank guarantees, securities or otherwise, or
securities lying with the Clearing Corporation shall be dealt in such manner as the relevant authority
may prescribe from time to time.
11.
FAILURE TO PAY CHARGES
Save as otherwise provided in the Bye Laws, Rules and Regulations of the Clearing Corporation if a member
fails to pay his annual subscription, fees, deposit or contribution to Settlement Guarantee Fund(s), fines,
penalties, other charges or other monies which may be due by him to the Clearing Corporation within such time
as the relevant authority may prescribe from time to time after notice in writing has been served upon him by the
Clearing Corporation, he may be suspended by the relevant authority until he makes payment and if within a
further period of time as may be specified from time to time, he fails to make such payment, he may be declared
a defaulter or may be expelled by the relevant authority.
12.
CONTINUED ADMITTANCE
The relevant authority shall from time to time prescribe conditions and requirements for continued admittance to
Clearing Membership which may, inter alia, include maintenance of deposit or contribution to Settlement
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
17
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-3
Guarantee Fund, minimum networth and capital adequacy. The Clearing Membership of any person who fails to
meet these requirements shall be liable to be terminated.
13.
RE-ADMISSION OF DEFAULTERS
(1)
A Clearing Member's right of membership shall lapse and vest with the Clearing Corporation
immediately he is declared a defaulter. The Clearing Member who is declared a defaulter shall forfeit all
his rights and privileges as a Clearing Member of the Clearing Corporation, including any right to use of
or any claim upon or any interest in any property or funds of the Clearing Member with the Clearing
Corporation.
(2)
The relevant authority reserves the right to re-admit a defaulting member and it may re-admit a defaulter
as a Clearing Member subject to the provisions, terms and conditions as may be prescribed by the
relevant authority from time to time.
(3)
The relevant authority may re-admit only such defaulter who in its opinion:
(a)
has paid up all dues to the Clearing Corporation, other Clearing Members and constituents;
(b)
has no insolvency proceedings against him in a Court or has not been declared insolvent by any
Court;
(c)
has defaulted owing to the default of principals whom he might have reasonably expected to be
good for their commitments;
(d)
has not been guilty of bad faith or breach of the Bye Laws, Rules and Regulations of the
Clearing Corporation;
(e)
has been irreproachable in his general conduct and is otherwise found to be ‘Fit and Proper’.
CHAPTER V
DISCIPLINARY PROCEEDINGS, PENALTIES, SUSPENSION AND EXPULSION
1.
DISCIPLINARY JURISDICTION
The relevant authority may expel or suspend and/or fine and/or penalise under censure and/or warn and/or
withdraw all or any of the membership rights of a Clearing Member if it be guilty of contravention, non-
compliance, disobedience, disregard or evasion of any of the Bye Laws, Rules and Regulations of the Clearing
Corporation or of any resolutions, orders, notices, directions or decisions or rulings of the Clearing Corporation
or the relevant authority or of any other Committee or officer of the Clearing Corporation authorised in that
behalf or of any conduct, proceeding or method of business which the relevant authority in its absolute discretion
deems dishonorable, disgraceful or unbecoming a Clearing Member of the Clearing Corporation or inconsistent
with just and equitable principles or detrimental to the interests, good name or welfare of the Clearing
Corporation or prejudicial or subversive to its objects and purposes.
2.
PENALTY FOR BREACH OF RULES, BYE-LAWS AND REGULATIONS
Every Clearing Member shall be liable to suspension, expulsion or withdrawal of all or any of his Clearing
Membership rights and/or to payment of fine and/or to be censured, reprimanded or warned for contravening,
disobeying, disregarding or willfully evading of any of these Rules, Bye-laws and Regulations or any resolutions,
orders, notices, directions, decisions or rulings thereunder of the Clearing Corporation, the Board of Directors,
Executive Committee, Managing Director or any officer of the Clearing Corporation or for any disreputable or
fraudulent transactions or dealings or method of business which the Board of Directors in its absolute discretion
deems unbecoming a Clearing Member of the Clearing Corporation or inconsistent with just and equitable
principles.
3.
PENALTY
FOR
MISCONDUCT,
UNBUSINESSLIKE
CONDUCT
AND
UNPROFESIONAL
CONDUCT
A Clearing Member shall be liable to expulsion or suspension or withdrawal of all or any of his membership
rights and/or to payment of a fine and/or penalty and/or to be censured, reprimanded or warned for any
misconduct, unbusinesslike conduct or unprofessional conduct as provided in the provisions in that behalf as
provided herein.
(1)
Misconduct
(a)
Fraud: If he is convicted of a criminal offence or commits fraud or a fraudulent act which in
the opinion of the relevant authority renders him unfit to be a Clearing Member;
(b)
Violation: If he has violated provisions of any statute governing the
activities, business and
operations of the Clearing Corporation, Clearing Members and securities business in general;
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
18
(c)
Improper Conduct: If in the opinion of the relevant authority he is guilty of dishonourable or
disgraceful or disorderly or improper conduct on the Clearing Corporation or of willfully
obstructing the business of the Clearing Corporation;
(d)
Breach of Rules, Bye Laws and Regulations: If he shields or assists or omits to report any
Clearing Member whom he has known to have committed a breach or evasion of any Bye
Laws, Rules and Regulation of the Clearing Corporation or of any resolution, order, notice or
direction thereunder of the relevant authority or of any Committee or officer or the Clearing
Corporation authorised in that behalf;
(e)
Failure to comply with Resolutions : If he contravenes or refuses or fails to comply with or
abide by any resolution, order, notice, direction, decision or ruling of the relevant authority or
of any Committee or officer of the Clearing Corporation or other person authorised in that
behalf under the Bye Laws, Rules and Regulations of the Clearing Corporation;
(f)
Failure to submit to or abide by Arbitration : If he neglects or fails or refuses to submit to the
relevant authority or to a Committee or an officer of the Clearing Corporation authorised in
that behalf, such books, correspondence, documents and papers or any part thereof as may be
required to be produced or to appear and testify before or cause any of its partners, attorneys,
agents, authorised representatives or employees to appear and testify before the relevant
authority or such Committee or officer of the Clearing Corporation or other person authorised
in that behalf;
(g)
Failure to testify or give information : If he neglects or fails or refuses to submit to the
relevant authority or to a Committee or an officer of the Clearing Corporation authorised in
that behalf, such books, correspondence, documents and papers or any part thereof as may be
required to be produced or to appear and testify before or cause any of its partners, attorneys,
agents, authorised representatives or employees to appear and testify before the relevant
authority or such Committee or officer of the Clearing Corporation or other person authorised
in that behalf;
(h)
Failure to submit Special Returns : If he neglects or fails or refuses to submit to the relevant
authority within the time notified in that behalf special returns in such form as the relevant
authority may from time to time prescribe together with such other information as the relevant
authority may require whenever circumstances arise which in the opinion of the relevant
authority make it desirable that such special returns or information should be furnished by any
or all the Clearing Members;
(i)
Failure to submit Audited Accounts : If he neglects or fails or refuses to submit its audited
accounts to the Clearing Corporation within such time as may be prescribed by the relevant
authority from time to time;
(j)
Failure to compare or submit accounts with Defaulter : If he neglects or fails to compare his
accounts with the relevant authority or to submit to it a statement of its accounts with a
defaulter or a certificate that he has no such account or if he makes a false or misleading
statement therein;
(k)
False or misleading Returns : If he neglects or fails or refuses to submit or makes any false or
misleading statement in his clearing forms or returns required to be submitted to the Clearing
Corporation under the Bye Laws, Rules and Regulations;
(l)
Vexatious complaints : If he or his agent brings before the relevant authority or a Committee or
an officer of the Clearing Corporation or other person authorised in that behalf a charge,
complaint or suit which in the opinion of the relevant authority is frivolous, vexatious or
malicious;
(m)
Failure to pay dues and fees : If he fails to pay his subscription, fees, arbitration charges or any
other money which may be due by it or any fine or penalty imposed on him.
(2)
Unbusinesslike Conduct
A Clearing Member shall be deemed guilty of unbusinesslike conduct for any of the following or
similar acts or omissions namely:
(a)
Fictitious Names: If he transacts his own business or the business of his constituent in fictitious
names or if he carries on business in more than one clearing segment of the Clearing
Corporation under fictitious names;
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
19
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-3+
(b)
Circulation of rumours: If he, in any manner, circulates or causes to be circulated, any
rumours;
(c)
Unwarrantable Business: If he engages in reckless or unwarrantable or unbusinesslike dealings
in the market or effects purchases or sales for his constituent's account or for any account in
which he is directly or indirectly interested which purchases or sales are excessive in view of
his constituent's or his own means and financial resources or in view of the market for such
security;
(d)
Compromise : If he connives at a private failure of a Clearing Member or accepts less than full
and bona fide money payment in settlement of a debit due by a Clearing Member arising out of
a deal in securities;
(e)
Dishonoured Cheque : If he issues to any other Clearing Member or to its constituents or to the
Clearing Corporation a cheque which is dishonoured on presentation for whatever reasons;
(f)
Failure to carry out transactions with Constituent: If he fails in the opinion of the relevant
authority to carry out its committed transactions with its constituents;
(3)
Unprofessional Conduct
A Clearing Member shall be deemed guilty of unprofessional conduct for any of the following or
similar acts or omissions namely:
(a)
Business in Securities in which dealings not permitted: If he enters into dealings in securities in
which dealings are not permitted;
(b)
Business for Defaulting Constituent : If he deals or transacts business directly or indirectly or
executes an order for a constituent who has within his knowledge failed to carry out
engagements relating to securities and is in default to another Clearing Member unless such
constituent shall have made a satisfactory arrangement with the Clearing Member who is his
creditor;
(c)
Business for Insolvent : If without first obtaining the consent of the relevant authority he
directly or indirectly is interested in or associated in business with or transacts any business
with or for any individual who has been bankrupt or insolvent even though such individual
shall have obtained his final discharge from an Insolvency Court;
(d)
Business without permission when under suspension : If without the permission of the relevant
authority he does business on his own account or on account of a principal with or through a
Clearing Member during the period he is required by the relevant authority to suspend business
on the Clearing Corporation;
(e)
Business for or with suspended, expelled and defaulter Clearing Members: If without the
special permission of the relevant authority he shares brokerage with or carries on business or
makes any deal for or with any Clearing Member who has been suspended, expelled or
declared a defaulter;
(f)
Business for Employees of other Clearing Members : If he transacts business directly or
indirectly for or with or executes a deal for a authorised representative or employee of another
Clearing Member without the written consent of such employing Clearing Member;
(g)
Evasion of Margin Requirements: If he willfully evades or attempts to evade or assists in
evading the margin requirements prescribed in these Bye Laws and Regulations;
(h)
Clearing Fees: If he willfully evades or attempts to evade or assists in evading the Bye Laws
and Regulations relating to clearing fees.
(i)
Advertisement: If it advertises for business purposes or issues regularly circular or other
business communication to persons other than its own constituents, trading members of the
Exchange, Banks and Joint Stock Companies or publishes pamphlets, circulars or any other
literature or report or information relating to the stock markets, without the prior written
permission of the Clearing Corporation or in contravention of the advertisement code
prescribed by the Clearing Corporation.
4.
CLEARING MEMBER RESPONSIBLE FOR PARTNERS, AGENTS AND EMPLOYEES
A Clearing Member shall be fully responsible for the acts and omissions of its authorised officials, attorneys,
agents, authorised representatives and employees and if any such act or omission be held by the relevant
authority to be one which if committed or omitted by the Clearing Member would subject it to any of the
penalties as provided in the Bye Laws, Rules and Regulations of the Clearing Corporation then such Clearing
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
20
Member shall be liable thereof to the same penalty to the same extent as if such act or omission had been done or
omitted by him.
5.
SUSPENSION ON FAILURE TO PROVIDE MARGIN DEPOSIT, DEPOSIT OR CONTRIBUTION TO
SETTLEMENT GUARANTEE FUND OR CAPITAL ADEQUACY REQUIREMENTS
The relevant authority may suspend a Clearing Member and/or require a Clearing Member to suspend his
business if he fails to provide the margin deposits, deposits and contributions to Settlement Guarantee Fund
and/or meet capital adequacy norms as provided in these Bye Laws, Rules and Regulations and the suspension of
business shall continue until the Clearing Member furnishes the necessary margin deposit or deposit/contribution
to Settlement Guarantee Fund or meet capital adequacy requirements. The relevant authority may expel Clearing
Member acting in contravention of this provision.
6.
SUSPENSION OF BUSINESS
The relevant authority may suspend a Clearing Member and/or require a Clearing Member to suspend its
business in part or in whole:
a)
Unwarrantable Business: When in the opinion of the relevant authority the Clearing Member engages in
unwarrantable business or effects deals for its constituent's account or for any account in which he is
directly or indirectly interested which deals are excessive in view of his constituent's or his own means
and financial resources or in view of the market for such security, or
b)
Unsatisfactory Financial Condition: When in the opinion of the relevant authority the Clearing Member
is in such financial condition that he cannot be permitted to do business with safety to his creditors or
the Clearing Corporation.
7.
REMOVAL OF SUSPENSION
The suspension of business as mentioned above shall continue until the Clearing Member has been allowed by
the relevant authority to resume his business on paying such deposit or his doing such act or providing such thing
as the relevant authority may require.
8.
PENALTY FOR CONTRAVENTION
A Clearing Member who is suspended or who is required to suspend his business or part thereof may be expelled
by the relevant authority if he acts in contravention of such suspension or requirement.
9.
CLEARING MEMBERS AND OTHERS TO TESTIFY AND GIVE INFORMATION
A Clearing Member shall appear and testify before and cause its partners, attorneys, agents, authorised
representatives and employees to appear and testify before the relevant authority or before other Committee(s) or
an officer of the Clearing Corporation authorised in that behalf and shall produce before the relevant authority or
before other Committee(s) or an officer of the Clearing Corporation authorised in that behalf, such books,
correspondence, documents, papers and records or any part thereof which may be in its possession and which
may be deemed relevant or material to any matter under inquiry or investigation.
10.
PERMISSION NECESSARY FOR LEGAL REPRESENTATION
No person shall have the right to be represented by professional counsel, attorney, advocate or other
representative in any investigation or hearing before the relevant authority or any other Committee unless the
relevant authority or other Committee so permits.
11.
EXPLANATION BEFORE EXPULSION
A Clearing Member shall be entitled to be summoned before the relevant authority and afforded an opportunity
for explanation before being expelled but in all cases the findings of the relevant authority shall be final and
conclusive.
12.
IMPOSITION OF PENALTIES
The penalty of suspension, withdrawal of all or any of the membership rights, fine, censure or warning may be
inflicted singly or conjointly by the relevant authority. The penalty of expulsion may be inflicted by relevant
authority.
13.
PRE-DETERMINATION OF PENALTIES
The relevant authority shall have the power to pre-determine the penalties, the period of any suspension, the
withdrawal of particular membership rights and the amount of any fine that would be imposed on contravention,
non-compliance, disobedience, disregard or evasion of any Bye Law, Rules or Regulations of the Clearing
Corporation or of any resolution, order, notice, direction, decision or ruling thereunder of the Clearing
Corporation, the relevant authority or of any other Committee or officer of the Clearing Corporation authorised
in that behalf.
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
21
14.
COMMUTATION
The relevant authority in its discretion may in any case suspend a Clearing Member in lieu of the penalty of
expulsion or may withdraw all or any of the membership rights or impose a fine in lieu of the penalty of
suspension or expulsion and may direct that the guilty Clearing Member be censured or warned or may reduce or
remit any such penalty on such terms and conditions as it deems fair and equitable.
15.
RECONSIDERATION/REVIEW
The relevant authority may of its own or on appeal by the Clearing Member concerned, reconsider and rescind,
revoke or modify its order fining, censuring, warning or withdrawing all or any of the membership rights of the
Clearing Member. In a like manner the relevant authority may rescind, revoke or modify its resolution expelling
or suspending any Clearing Member.
16.
FAILURE TO PAY FINES AND PENALTIES
If a Clearing Member fails to pay any fine or penalty imposed on him within such period as prescribed from time
to time by the relevant authority he may be suspended by the relevant authority until he makes payment and if
within a further period as prescribed from time to time he fails to make such payment he may be expelled by the
relevant authority.
17.
CONSEQUENCES OF SUSPENSION
The suspension of a Clearing Member shall have the following consequences namely:
(1)
Suspension of Membership Rights
A suspended Clearing Member shall during the terms of his suspension, be deprived of and excluded
from all rights and privileges of membership but he may be proceeded against by the relevant authority
for any offense committed by him before or after suspension and the relevant authority shall not be
debarred from taking cognisance of and dealing with or adjudicating on claims made against him by
other Clearing Members;
(2)
Rights of creditors unimpaired
The suspension shall not affect the rights of Clearing Members who are creditors of the suspended
Clearing Members and rights of the Clearing Corporation;
(3)
Fulfilment of Deals and Obligations
The suspended Clearing Member shall be bound to fulfill obligations and deals outstanding at the time
of his suspension;
(4)
Further business prohibited
The suspended Clearing Member shall not during the terms of his suspension transact any business
provided that he may with permission of the relevant authority close the deals outstanding at the time of
his suspension;
18.
CONSEQUENCES OF EXPULSION
The expulsion of a Clearing Member shall have the following consequences namely:
(1)
Clearing Membership Rights forfeited
The expelled Clearing Member shall forfeit to the Clearing Corporation its right of Clearing
Membership and all rights and privileges as a Clearing Member of the Clearing Corporation including
any right to the use of any claim upon or any interest in any property or funds of the Clearing
Corporation but any liability of any such Clearing Member to the Clearing Corporation or to any
Clearing Member of the Clearing Corporation shall continue and remain unaffected by its expulsion;
(2)
Office vacated
The expulsion shall create a vacancy in any office or position held by the expelled Clearing Member;
(3)
Rights of Creditors unimpaired
The expulsion shall not affect the rights of the Clearing Members who are creditors of the expelled
Clearing Member;
(4)
Fulfilment of Deals and Obligations
The expelled Clearing Member shall be bound to fulfill deals and obligations outstanding at the time of
his expulsion and he may with the permission of the relevant authority close such outstanding
transactions;
(5)
Clearing Members not to deal
No Clearing Member shall transact business for or with the expelled Clearing Member except with the
previous permission of the relevant authority.
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22
(6)
Consequences of declaration of defaulter to follow
The provisions of Chapter XI of the Bye Laws pertaining to default shall become applicable to the
Clearing Member expelled from the Clearing Corporation as if such Clearing Member has been
declared a defaulter.
(7)
Expulsion Rules to Apply
When a Clearing Member ceases to be such under the provisions of these Bye Laws and Rules
otherwise than by death, default or resignation it shall be as if such Clearing Member has been expelled
by the relevant authority and in that event all the provisions relating to expulsion contained in these
Rules shall apply to such Clearing Member in all respects.
19.
NOTICE OF PENALTY AND SUSPENSION OF BUSINESS
(1)
Notice shall be given to the Clearing Member concerned and to the Clearing Members in general by
such mode as may be decided by the relevant authority from time to time of the expulsion or suspension
or default of or of the suspension of business by a Clearing Member or of any other penalty imposed on
it or on its partners or other employees. The relevant authority may in its absolute discretion and in such
manner as it thinks fit notify or cause to be notified to the Clearing Members of the Clearing
Corporation or to the public that any person who is named in such notification has been expelled,
suspended, penalised or declared a defaulter or has suspended his business or ceased to be a Clearing
Member. No action or other proceedings shall in any circumstances be maintainable by such person
against the Clearing Corporation or the relevant authority or any officer or employee of the Clearing
Corporation for the publication or circulation of such notification. The application for Clearing
Membership or the application for registration as the constituted attorney or authorised representative or
by the person concerned shall operate as license and this Bye Laws and Rules shall operate as leave to
print, publish or circulate such advertisement or notification and be pleadable accordingly.
(2)
Notwithstanding anything contained in these provisions, if in the opinion of the relevant authority it is
necessary to do so, he may, for reasons to be recorded in writing, temporarily suspend forthwith the
Clearing Member, pending completion of appropriate proceedings for suspension under this chapter by
the relevant authority, and no notice of hearing shall be required for such temporary suspension and
such temporary suspension shall have the same consequences of suspension under this chapter, provided
that appropriate proceedings provided in this chapter shall be commenced by issue of a notice to show
cause to the Clearing Member within 10 days of such temporary suspension. Any such temporary
suspension may be revoked at the discretion of the relevant authority, for reasons to be recorded in
writing, if the relevant authority is satisfied that the circumstances leading to the formation of opinion of
the relevant authority to suspend, has ceased to exist or are satisfactorily resolved.
Mumbai
Avni Patel
Date: 23.01.2019
Company Secretary
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23
The proposed Bye-laws for Commodity Derivatives Segment of METROPOLITAN CLEARING CORPORATION
OF INDIA LIMITED (MCCIL) were published in the Gazette of India in Part-IV, September 15 - September 21,
2018 for inviting public comments. Pursuant thereto, the Securities and Exchange Board of India (SEBI), has vide
its letter no. SEBI/HO/CDMRD/DRMP/OW/P/2019/1155/1 dated January 10, 2019 conveyed its approval to the
Bye-laws for Commodity Derivatives Segment of Metropolitan Clearing Corporation of India Limited as under.
BYE LAWS OF METROPOLITAN CLEARING CORPORATION OF INDIA LIMITED (COMMODITY
DERIVATIVES SEGMENT)
CHAPTER I
DEFINITIONS
.
1.
ARTICLES
“Articles” means the Articles of Association of Metropolitan Clearing Corporation of India Limited and
includes any modification or alteration thereof for the time being in force.
2.
BOARD
"Board" means Board of Directors of Metropolitan Clearing Corporation of India Limited.
3.
BUYING CLEARING MEMBER
“Buying Clearing Member” means a Clearing Member handling the Clearing and Settlement functions of a
Client or a Constituent who or whose client has purchased a Security on the Trading floor of the Concerned
Exchange pursuant to which it is obligated to honour the purchase obligation by following all the prescribed
procedures
4.
CIRCULAR or NOTICE
“Circular or Notice” means informational notifications or a binding communication issued from time to time
by the Clearing Corporation to its Member(s) and the Market in general and transmitted by fax, e-mail or any
other mode and manner which the Clearing Corporation may deem appropriate, including publication through
the website and titled “Circular” or “Notice” accordingly.
5.
CLEARING AND SETTLEMENT
"Clearing and Settlement" means clearing or settlement or clearing and settlement of deals in such
manner and subject to such conditions as may be specified by the Relevant Authority from time to time, unless
the context indicates otherwise.
6.
CLEARING BANK(S)
Clearing Bank(s) is such bank(s) as the Clearing Corporation may appoint to act as a funds settling agency, for
the collection of margin money for all deals cleared through the Clearing Corporation and any other funds
movement between clearing members and the Clearing Corporation and between clearing members inter-se as
may be directed by the Clearing Corporation from time to time.
7.
CLEARING CORPORATION
Clearing Corporation means Metropolitan Clearing Corporation of India Limited and its successors (if any).
8.
CLEARING MEMBER
"Clearing Member" means a member of the Clearing Corporation and includes all categories of clearing
members as may be admitted as such by the Clearing Corporation but does not denote the shareholders of the
Clearing Corporation.
9.
CLEARING SEGMENTS
"Clearing Segments" means the different categories of securities, within a Market segment type, that the
Concerned Exchange makes available to their respective Trading Members for dealing on their trading
platform and has been agreed to by the Clearing Corporation for being admitted to its Clearing and Settlement
mechanism in terms of these Bye laws and categorized appropriately.
10. CLEARING SUB SEGMENTS
Clearing Sub Segments means and includes those categories of securities falling under a broad head of clearing
segment but differentiated either on the basis of market acceptability and practice or the product or security
profile and attributes.
11. CLIENT /CONSTITUENT
A Client/Constituent means a person, on whose instructions and on whose account the clearing member clears
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
24
Sr. No. M-18254
and settles deals on the Clearing Corporation. For this purpose, the term client shall include all registered
constituents of trading members of Specified Exchange.
Explanation 1: The terms “Constituent‟ and “Client‟ are used interchangeably in these Byelaws, Rules &
Regulations and shall have the same meaning assigned herein.
Explanation 2: For „Constituent‟ in relation to trades shall also include a trading member where such trades
done on the Specified Exchange are cleared and settled on his behalf by a Clearing Member.
12. CLOSE-OUT OR CLOSING OUT OR SQUARE OFF
“Close-out or Closing out or Square off” means the cancellation of an outstanding open position in one
direction with an equal and opposite position
13. COLLATERAL
“Collateral” means and includes cash or financial instruments (including but not limited to Fixed Deposit
Receipts, bank guarantees, government securities and units of the schemes of liquid mutual funds or
government securities, receipts of accredited warehousing Corporations) and/or Commodities as approved by
the Relevant Authority from time to time through Notifications and/or Circulars for the provision of Initial
Margin or other deposits and Margins in accordance with these Bye-Laws, the Rules and the Regulations made
under these Bye-Laws.
14. COMMODITY DERIVATIVE
“Commodity Derivative” means “commodity derivative” as defined under Section 2(bc) of the Securities
Contract (Regulation) Act, 1956 as amended from time to time and includes such other contract as may be
permitted by SEBI to trade under “commodity derivative segment”.
15. CONCERNED/ SPECIFIED EXCHANGE
“Concerned/ Specified Exchange” means any Stock Exchange duly recognized under SCRA which has entered
into an arrangement with the Clearing Corporation for carrying out all operational procedures and regulatory
functions in the matter of Clearing and Settlement of the Deals executed on its trading platform between its
Trading members so as to complete the fulfilment of the funds pay-in, Securities delivery and the related pay-
out obligations concerning such Deals.
16. DEAL
"Deal" means, unless the context indicates otherwise, a deal which is admitted to be cleared and settled
through the Clearing Corporation.
17. DELIVERING MEMBER
"Delivering Member" means a clearing member who has to or has given delivery or has delivered documents
of title in fulfillment of contract to which these Rules, Bye Laws and Regulations apply unless the context
indicates otherwise.
18. FINAL SETTLEMENT PRICE
‘Final Settlement Price’ in respect of a contract means Due Date Rate (DDR) determined by the Clearing
Corporation for settling that contract in accordance with the method specified in the Contract Specification or
such other method as may be notified by the Relevant Authority.
19. PARTICIPANT
“Participant” means and refers to an entity accredited or permitted by the Clearing Corporation through an
arrangement or agreement to participate in one or more of the processes of the clearing and settlement
mechanism towards facilitating the completing of the said processes in accordance with the Bye laws, Rules
and Regulations framed from time to time for such purpose and subject to such terms and conditions, as may
be prescribed by the Relevant Authority.
20. RECEIVING MEMBER
"Receiving Member" means a clearing member who has to receive or has a right to receive or has received
documents of title in fulfillment of contracts to which these Rules, Bye Laws and Regulations apply unless the
context indicates otherwise.
21. REGULATIONS
"Regulations" means Regulations of the Clearing Corporation for the time being in force and includes business
rules, code of conduct and such other procedures and regulations, circulars, directives and orders as issued
by the relevant authority from time to time for the operations of the Clearing Corporation.
22. RELEVANT AUTHORITY
"Relevant Authority" means the Board or such other authority as specified by the Board from time to time as
relevant for a specified purpose.
23. RULES
Unless the context indicates otherwise, "Rules" means the Rules of Clearing Corporation for the time being in
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25
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-4
force.
24. SEBI
"SEBI" is the abbreviation for the Securities and Exchange Board of India.
25. SCRA
SCRA is the abbreviation for Securities Contracts (Regulation) Act, 1956.
26. SCRR
SCRR is the abbreviation for Securities Contracts (Regulation) Rules, 1957
27. SECC
SECC is the abbreviation for Securities Contracts (Regulation) (Stock Exchange and Clearing Corporations)
Regulations, 2018.
28. SELLING CLEARING MEMBER
“Selling Clearing Member” means a Clearing Member handling the Clearing and Settlement functions of a
Client or a Constituent who or whose client has sold a Security on the Trading floor of the Concerned
Exchange pursuant to which it is obligated to honour the sale obligation by following all the prescribed
procedures.
29. SECURITIES
"Securities" shall have the meaning assigned to it in the Securities Contracts (Regulation) Act, 1956 and shall
also include such other class of instruments or products, monetary or non- monetary, scrip-less or
otherwise, as may be admitted to be cleared and settled through the Clearing Corporation.
30.
CORE SETTLEMENT GUARANTEE FUND
Core Settlement Guarantee Fund means a fund established and maintained in accordance with the relevant
provisions of these Bye Laws.
31.
TRADING MEMBER
"Trading Member" or "trading member" means any person admitted as a member in any specified Stock
Exchange in accordance with the Rules, Bye Laws and Regulations of that Stock Exchange.
Note : The terms defined above shall mean the same when used in lower case in the Bye Laws, Rules and
Regulations, unless the context indicates otherwise.
32.
UNDERLYING
“Underlying” refers to Goods or Security or such other assets as may be specified in the contract
specification..
33.
WAREHOUSE
“Warehouse” means and includes any place of storage, godown, tank, silos, store house, vault, etc where
commodities are capable of being received and stored.
34.
WAREHOUSE / VAULT RECEIPT
“Warehouse / Vault Receipt” means a document, whether in physical or electronic form evidencing a
commodity being held in an approved or accredited warehouse.
35.
WAREHOUSE SERVICE PROVIDER
“Warehouse Service Provider (WSP)” means an agency approved and accredited by the Clearing Corporation
for the storage and preservation of any Underlying.
CHAPTER II
CLEARING SEGMENTS
1.
There may be more than one clearing sub-segment as may be specified by the relevant authority under
these Bye-laws from time to time, subject to approval by SEBI under Regulation 36 of Securities Contracts
(Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018
2.
The Clearing Corporation may establish more than one clearing sub-segment or division in the Commodity
Derivatives Segment and/or any other segments as may be specified by the relevant authority from time to
time. Deals which may be admitted to the different clearing sub-segments or divisions of Commodity
Derivatives Segment for the purpose of clearing and settlement will be specified by the relevant authority
from time to time.
CHAPTER III
STATUTORY AND OTHER COMMITTEES
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26
1.
The Board may, from time to time, constitute one or more committees comprising of members of the Board
or such other members as the Board may in its discretion deem fit or necessary or as may be prescribed by
SEBI from time to time.
2.
The Board may specify the terms of reference of such committee and delegate to such committees such
powers as the Board may deem fit or as may be prescribed by SEBI from time to time and the Board may
from time to time revoke such delegation or dissolve such committees.
CHAPTER IV
REGULATIONS
The Board or the Executive Committee may prescribe Regulations from time to time for the functioning and
operations of the Commodity Derivatives Segment and to regulate the functioning and operations of the
clearing members of the Commodity Derivatives Segment.
Without prejudice to the generality of the above, the Board or the Relevant Authority may prescribe
regulations from time to time, inter alia, with respect to:
1)
norms, procedures, terms and conditions for admission of one or more Exchanges for clearing and settlement of
deals/ trades done on those Exchanges;
2)
norms, procedures, mechanisms for dissemination of spot prices arrived at through spot price polling process;
norms, procedures, terms and conditions to be complied with for admission of deals for clearing and settlement
in the Commodity Derivatives Segment by the Clearing Corporation;
3)
norms, procedures, terms and conditions for clearing and settlement of deals in the Commodity Derivatives
Segment;
4)
forms and conditions of deals to be entered into, and the time, mode and manner for performance of
deals between clearing members inter se or between clearing members and their constituents;
5)
norms, procedures, terms and conditions for guaranteed settlement by the Commodity Derivatives
Segment;
6)
prescription, from time to time, and administration of penalties, fines and other consequences, including
suspension/expulsion of clearing members from the Commodity Derivatives Segment for defaults;
7)
norms, procedures, terms and conditions for imposition and administration of different types of margins and
other charges and restrictions that may be imposed by the Commodity Derivatives Segment from time to time.
8)
determination from time to time, of fees, system usage charges, deposits, margins and other monies
payable to the Clearing Corporation by clearing members of the Commodity Derivatives Segment and the
scale of clearing and other charges that may be collected by such clearing members;
9)
supervision of the clearing operations and promulgation of such Business Rules and Codes of Conduct as
it may deem fit;
10) maintenance of records and books of accounts by clearing members as it may deem fit and records as required
under the Securities Contracts (Regulation) Act and Rules made thereunder or any other law for the time being
in force
11) inspection and audit of records and books of accounts of clearing members;
12) settlement of disputes, complaints, claims arising between clearing members inter-se as well as between
clearing members and persons who are not clearing members relating to any deal in securities cleared and
settled through the Commodity Derivatives Segment including settlement by arbitration;
13) norms, procedures, terms and conditions for arbitration;
14) the manner of empanelment, operations and interfacing with exchanges, Warehouse Service Providers,
Warehousing entities, Custodians, Depository (ies) and Clearing banks;
15) norms and procedures for availing services from Warehouses and Warehouse service providers for physical
delivery of the Underlying commodities and from surveyors , assaying agencies, quality testing and certification
laboratories/ agencies and other appropriate authorities and agencies;
16) terms of appointment and dissolution of committees of the Clearing Corporation;
17) process for expulsion or suspension of Clearing Members;
18) administration, maintenance and investment of the corpus of the Fund(s) set up by the Commodity
Derivatives Segment including Core Settlement Guarantee Fund(s);
19) establishment, norms, terms and conditions, functioning and procedures of clearing house, clearing
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27
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through depository or other arrangements including custodial services for clearing and settlement;
20) norms, procedures, terms and conditions in respect of, incidental to or consequential to closing out of
deals;
21) exercise its powers in such other matters in relation to the Clearing Corporation as may be specified under the
provisions of the Memorandum and/ or Articles of Association or these Bye-laws as may be necessary or
expedient for the maintenance, control, management, regulation and facilitation of the operations of the
Clearing Corporation;
22) dissemination of information and announcements;
23) any other matter as may be decided by the Board.
CHAPTER V
CLEARING MEMBERS
1.
The relevant authority is empowered to admit clearing members in accordance with Rules and
Regulations. The Clearing Member shall pay such fees, security deposits and other monies as may
be specified by the Board or the relevant authority from time to time, on admission as Clearing
Member and for continued admission. The fees, security deposits, other monies and any additional
deposits paid, whether in the form of cash, bank guarantee, commodity, securities or otherwise, with
the Clearing Corporation, by a Clearing Member from time to time, shall be subject to a first and
paramount lien for any sum due to the Clearing Corporation and all other claims against the
Clearing Member for due fulfillment of engagements, obligations and liabilities of Clearing
Members arising out of or incidental to any dealings made subject to the Byelaws, Rules and
Regulations of the Clearing Corporation. The Clearing Corporation shall be entitled to adjust or
appropriate such fees, deposits and other monies for such dues and claims, to the exclusion of the
other claims against the Clearing member, without any reference to the Clearing member. The
proceeds arising out of invocation of the bank guarantees furnished by the Clearing Member in lieu
of security deposits or additional deposits, on being invoked by the Clearing Corporation, shall not
be reckoned as part of the Clearing Member’s deposits for the purpose of enablement or exposure,
etc., unless the Clearing Member complies with the conditions imposed by the Relevant Authority
from time to time. The Clearing Corporation may utilise the proceeds of the bank guarantee so
invoked for the purpose of settlement of claims / dues of the Clearing Corporation and towards
claims of the stock exchanges or SEBI against the Member. The surplus, if any, shall be refunded to
the Member
2.
The relevant authority may specify prerequisites, conditions, formats and procedures for application for
admission, termination, re-admission, etc. of clearing members to each clearing segment. The relevant
authority may, at its absolute discretion, refuse permission to any applicant to be appointed as
clearing member.
3.
Clearing member of any segment may clear and settle deals through the Clearing Corporation pertinent to that
segment in such manner and mode and subject to such terms and conditions and procedures as may be
prescribed for the clearing member.
4.
Clearing members may clear and settle deals either on their own account or on behalf of their clients
unless otherwise specified by the relevant authority and subject to such terms and conditions which the
relevant authority may prescribe from time to time.
5.
(a) Clearing members shall adhere to the Bye Laws, Rules and Regulations of the Clearing Corporation and
shall comply with such operational parameters, rulings, notices, guidelines and instructions of the relevant
authority as may be applicable.
b)
All deals cleared on the Clearing Corporation shall be in accordance with the Bye Laws, Rules and
Regulations of the Clearing Corporation.
c)
Clearing members shall furnish declarations relating to such matters and in such forms as may be
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
28
prescribed by the relevant authority from time to time.
d)
Clearing members shall furnish such information and periodic returns pertaining to their operations as
may be required by the relevant authority from time to time.
e)
Clearing members shall furnish to the extent such audited and/or unaudited financial or quantitative
information and statements as may be required by the relevant authority from time to time.
f)
Clearing members shall extend full co-operation and furnish such information and explanation as may be
required for the purpose of any inspection or audit authorised by the relevant authority or other authorised
official of the Stock Exchange/ Clearing Corporation into or in regard to any dealings, their settlement,
accounting and/or other related matters.
g)
Subject to these Bye –Laws, the requirements of SEBI, the Relevant Authority may from time to time
prescribe terms and conditions in respect of matters concerning the transfer or the transmission of clearing
membership of the Clearing Corporation or the decision of a Clearing Member to surrender or withdraw/
resign from the clearing membership of the Clearing Corporation.
h)
Without prejudice to the rights of the Clearing Corporation or the Disciplinary Action Committee under
these Bye-laws, the Rules and Regulations made thereunder a Clearing Member’s rights and privileges
may be suspended either in whole or in part or terminated where the Clearing Member has breached,
failed to meet or violated certain requirements that may be prescribed by the Relevant Authority from
time to time and the consequence of such breach, failure or violation is suspension or termination of
Clearing Membership.
i)
An Applicant Clearing Members shall not be entitled to exercise any of the rights or privileges of Clearing
Membership unless it:
has paid in full the clearing membership fees, annual fees and other charges, deposits or fees as
may be specified by the Clearing Corporation;
meets the applicable minimum capital and financial requirements specified in the Rules and / or
circulars issued by the Relevant Authority and/ or;
has obtained permission or is exempted under the Relevant statutes from holding license/
authorization/ recognition.
CHAPTER VI
CLEARING AND SETTLEMENT OF DEALS
A. DEALS FOR CLEARING AND SETTLEMENT
1.
CLEARING AND SETTLEMENT OF DEALS
(1)
The Commodity Derivative segment of the Clearing Corporation shall clear and settle such deals
as provided in the Bye Laws and Regulations and save as so provided, no other deals shall be
cleared and settled.
(2)
Without prejudice to the generality of the above, the relevant authority may in its discretion and
subject to such conditions as it may deem fit admit any other deals.
2.
ADMISSION OF DEALS
(1)
Clearing and settlement shall be permitted on the Clearing Corporation in deals which are from time
to time admitted on the Commodity Derivatives segments subject to approval of SEBI by the
relevant authority in accordance with the provisions of the Bye Laws and Regulations.
(2)
The relevant authority may specify securities from time to time dealings in which may be admitted
in accordance with the provisions of the Bye Laws and Regulations in that regard.
(3)
The relevant authority may specify stock exchanges from time to time dealings on which may be
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
29
admitted for clearing and settlement by the Commodity Derivatives segment in accordance with the
provisions of the Bye Laws and Regulations of the Clearing Corporation subject to approval by SEBI.
3.
CONDITIONS AND REQUIREMENTS OF CLEARING AND SETTLEMENT
The relevant authority may grant admission of deals dealt in the Exchange provided all the conditions
and requirements prescribed in the Bye Laws and Regulations and such other conditions and
requirements as the relevant authority may prescribe from time to time are complied with.
4.
REFUSAL OF ADMISSION OF DEALS
The relevant authority may, in its discretion, approve admission of deals or defer, or reject
admission of deals for clearing and settlement on the Commodity Derivatives segment, subject to
such terms as it deems fit.
5.
SPECIFIC DEALS
The relevant authority may permit in appropriate cases as it may at its discretion decide from time to
time specific deals to be cleared and settled through the Commodity Derivatives segment in case of
securities which are not admitted or are for the time being prohibited or suspended.
6.
SUSPENSION OF ADMISSION OF DEALS
The relevant authority may suspend at any time the admission of deals including of any security of
specified exchange on Commodity derivatives segment for such period as it may determine and
reinstate such deals subject to such conditions as it may deem fit.
7.
WITHDRAWAL OF ADMISSION OF DEALS
The relevant authority may where it deems necessary withdraw the admission to dealings of a
specified exchange either for breach of or non-compliance with any of the conditions or requirements
of admission of dealings or for any other reason whatsoever.
8.
READMISSION OF DEALS
The relevant authority in its discretion may readmit deals of a specified exchange which has
been previously withdrawn.
B. CLEARING AND SETTLEMENT OF DEALS
9.
CLEARING AND SETTLEMENT
(1)
Clearing and settlement of deals in Commodity Derivatives segment may be on netted basis or gross
basis or trade- for-trade basis or any other basis as may be specified by the relevant authority from
time to time. Settlement shall be effected by clearing members giving and receiving delivery and
paying and receiving funds as may be specified by the relevant authority from time to time in
the Bye Laws and Regulations.
(2)
The relevant authority may prescribe terms and conditions and processes and procedures for netting,
from time to time.’
Explanation: For the purpose of this Bye-law
“Netting” means the determination by Clearing Corporation of net payment or delivery obligations of
the clearing members of a recognised clearing corporation by setting off or adjustment of the inter se
obligations or claims arising out of buying and selling of securities including the claims and
obligations arising out of the termination by the Clearing Corporation or Stock Exchange, in such
circumstances as the Clearing Corporation may specify in bye-laws, of the transactions admitted for
settlement at a future date, so that only a net claim be demanded, or a net obligation be owed.
(A)
Novation
(a)
Novation means the act of a clearing corporation interposing itself between both parties of every
trade, being the legal counterparty to both.
(b)
The relevant authority may prescribe terms and conditions and processes and procedures to effect
novation, from time to time.
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
30
(B)
Settlement and Netting
1.
Payment and settlement in respect of a transaction between parties referred above, shall be final,
irrevocable and binding on the parties. When a settlement has become final and irrevocable, the right
of clearing corporation, to appropriate any collaterals or deposits or margins contributed by the
trading member, clearing member or client towards its settlement or other obligations in accordance
with the bye-laws shall take priority over any other liability of or claim against the said trading
member, clearing member or client, as the case may be.in terms of the applicable laws
2.
The relevant authority may prescribe terms and conditions and processes and procedures in this
regard, from time to time.
Explanation: For removal of doubts it is hereby declared that the settlement, whether gross or net
referred to in this bye-laws is final and irrevocable as soon as the money, securities or other
transactions payable as a result of such settlement is determined, whether or not such money, securities
or the relevant underlying are actually paid or delivered.
3.
The Clearing Corporation shall have the right to recover the dues of any of its Clearing Members in
one or more Clearing Segments from the collaterals, deposits and the assets of such Clearing Member
available with the Clearing Corporation across Clearing Segments and such right shall have priority
over any other liability of or claim against the said Clearing Member.
(C) Guarantee of Settlement of Trades
1.
The Clearing Corporation guarantees the completion of Clearing and settlement of deals admitted to it
for clearing and settlement of obligations in terms of the provisions of these Bye-Laws and the Rules
and Regulations of the Clearing Corporation.
2.
The relevant authority may prescribe terms and conditions and processes and procedures in respect of
settlement guarantee, from time to time.
3.
The relevant authority may from time to time exclude deals or classes of deals from the settlement
guarantee mentioned in clause (1) above.
10. PRIVITY OF CONTRACT
(1) Except as provided herein, Clearing members giving and receiving delivery as provided in the Bye
Laws and Regulations shall be deemed, notwithstanding that no direct contract may exist between
them, to have made a contract with each other as sellers and buyers. However the rights and liabilities
of delivering and receiving member in relation to their immediate contracting party shall not be
deemed to be affected thereby except that the selling member (unless he be himself the delivering
member) shall be released from all responsibility in regard to the title, ownership, genuineness,
regularity and validity of the documents received by the receiving member and in regard to the
loss and damages arising therefrom, which shall be dealt with in accordance with the provisions of
Bye Laws and Regulations thereof.
(2) In cases where the Clearing Corporation may specify either generally or specifically, clearing
members giving and receiving delivery and paying and receiving funds as provided in the Bye
Laws and Regulations shall be deemed, notwithstanding that no direct contract exists between
them, to have made a contract with the Clearing Corporation as sellers and buyers and between
themselves as delivering and receiving members; provided further however that in such event the
rights and liabilities of delivering and receiving member with the Clearing Corporation shall not be
deemed to be affected thereby except that the Clearing Corporation shall not be responsible in
respect of the title, ownership, genuineness, regularity and validity of the documents delivered or
received and in regard to the loss and damages arising therefrom, which shall be dealt with in
accordance with the provisions of Bye Laws and Regulations thereof.
11. ARRANGEMENT FOR CLEARING AND SETTLEMENT
(1)
Clearing and settlement of deals shall be effected by clearing members by adopting and using
such arrangements, systems, agencies or procedures as may be prescribed or specified by the
relevant authority from time to time. Without prejudice to the generality of the above, the relevant
authority may prescribe or specify from time to time such custodial, depository, Clearing Bank,
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
31
warehousing and other services for adoption and use by clearing members and their constituents to
facilitate smooth operation of the clearing and settlement arrangement or system.
(2)
The Clearing Corporation will act as the Central Counter party to all trades and will provide full
novation.
(3)
Save as otherwise expressly provided in the Bye Laws and Regulations, when funds and securities
are cleared and/or settled under a specified arrangement, the settlement responsibility shall rest
wholly and solely upon the counter parties to the contract and/or the concerned clearing members as
the case may be and the Clearing Corporation shall act as the common agent or facilitator, as may be
applicable, of the clearing members for receiving or giving delivery of securities and where
applicable the Underlying in respective delivery obligations under Derivatives contracts and for
receiving and paying funds, without incurring any liability or obligation as a principal.
(4)
The responsibility of Clearing Corporation under novation shall be for guarantee of funds pay-out
till marking of delivery and for guarantee of financial compensation (to make good losses of non-
defaulting party) in case of default (in goods or funds pay-in) after marking of delivery. In case of
disputes pertaining to quality or quantity / any damages arising after the delivery shall be addressed
through the complaint redressal mechanism, including arbitration mechanism of the Clearing
Corporation and can be settled in terms of financial compensation.
(5)
The nature of the guarantee by the Clearing Corporation is strictly financial, that is, in case of buyer
default or seller default, the Clearing Corporation shall guarantee financial compensation to make
good any monetary loss to non-defaulting party.
12. OPERATIONAL PARAMETERS FOR CLEARING
(1)
The relevant authority may determine and announce from time to time operational parameters
regarding clearing of deals through the Clearing Corporation in Commodity Derivatives segment
which the clearing members shall adhere to.
(2) The operational parameters may, inter alia, include :
a.
clearing/ exposure limits allowed which may include clearing limits with reference to networth
and capital adequacy norms;
b.
clearing volumes and limits at which it will be incumbent for clearing members to intimate
the Commodity Derivatives segment ;
c.
fixation of delivery lots for different settlement types;
d.
other matters which may affect smooth operation of clearing of deals keeping in view larger
interest of the public;
e.
determining types of deals permitted for a clearing member and for a security;
f.
determining functional details of the clearing and settlement system including the
system design, user infrastructure and system operation.
g.
Collection of margins from Clients and reporting collection of the same.
(3) In the matter of deliverable Commodity Derivative Contract, the Clearing Corporation shall ensure that
all parameters that have been stipulated by the Concerned Exchanges in the attributes of an
Underlying, including among others the determination of ‘basis’ variety and deliverable varieties for
different commodities, “on” and “off” allowances for tendering varieties other than the basis, contract
(delivery) months, delivery periods, delivery centers, tender days shall be met by the Delivering
Clearing Member. The Relevant Authority shall, through the Regulations and circulars and
notifications issued from time to time lay out all:
a)
requirements that a Delivering Clearing Member will need to fulfill in this regard including the
applicable allowances, if any;
b)
procedure for settlement of disputes relating to quality, price and delivery.
13. CLEARING HOURS
(1)
The hours for clearing and settling of Commodity Derivatives segments of the Clearing Corporation
shall be during such time as may be decided by the relevant authority from time to time. The
relevant authority may, from time to time, specify clearing hours for different types of deals and
different clearing sub segments or divisions of Commodity Derivatives segment.
(2)
The Relevant authority may at any time pre pone, extend, alter or postpone from time to time the
clearing days and time schedules for different Exchanges, Market/ segment/ securities.
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
32
(3)
Notwithstanding anything to the contrary contained in these byelaws, the Clearing Corporation may
for reasons to be recorded:
a.
Extend or postpone the time for Clearing and /or Settlement performance of securities in any deals
wherever in its opinion such action is called for public interest or by just and equitable principles of
trade or when circumstances beyond the control of either or both of the contracting parties make such
action desirable.
b.
Extend or postpone in any particular case, the time for the settlement performance of a Security from
any one Clearing schedule to the ensuing Clearing schedule.
c.
In the event of multiple settlements on a single day because of intervening holidays or otherwise, the
transactions shall be cleared and settled on a sequential basis or any other basis as may be specified
by the Clearing Corporation.
(4)
The relevant authority may declare a list of holidays in a calendar year. The relevant authority may
from time to time alter or cancel any of the holidays fixed in accordance with these provisions. It
may, for reasons to be recorded, suspend clearing and settlement operations in Commodity
Derivatives segment on days other than or in addition to holidays.
14. DELIVERY OF SECURITIES
(1)
Delivery and settlement of all securities, documents and papers and payment in respect of all
deals in the Commodity Derivatives segment shall be in such manner and such place(s) as may be
prescribed by the relevant authority from time to time.
(2)
The relevant authority shall specify from time to time, the goods and securities or documents in
lieu thereof which, when delivered in prescribed manner, shall constitute good delivery. Where
circumstances so warrant, the relevant authority may determine, for reasons to be recorded, whether
or not a delivery constitutes a good delivery, and such findings shall be binding on parties
concerned. Where the relevant authority determines that a delivery does not constitute a good
delivery, the delivering party shall be required to substitute good delivery instead within such time as
may be specified. Notwithstanding anything contained in the Bye-laws, the Clearing Corporation
shall ensure good delivery
(3)
The norms and procedures for delivery with respect to market lot, odd lot, minimum lot, part
delivery, delivery of partly paid securities etc., shall be as prescribed by the relevant authority
from time to time.
(4)
Clearing Corporation shall allocate the delivery orders / delivery received by it amongst one or more
buyers having outstanding long open positions in a manner as considered appropriate by the Relevant
Authority.
(5)
The Relevant Authority may specify in advance before commencement of a contract various grades
of a commodity that may be tendered and the discounts and premiums for such grades.
(6)
The requirements and procedures for determining disputed deliveries or defective deliveries, and
measures, procedures and system of resolving the dispute or defect in deliveries or of
consequences of such deliveries or their resolution shall, subject to these Bye Laws, be as
prescribed by the relevant authority from time to time.
15. CLOSING OUT
(1)
A deal admitted for clearing and settlement may be closed out on failure of a clearing member to
comply with any of the provisions relating to delivery, payment and settlement of deals or on any
failure to fulfill the terms and conditions subject to which the deal has been made, or such other
circumstances as the relevant authority may specify from time to time. The deal may be closed
out by the Clearing Corporation is such manner, within such time frame and subject to such
conditions and procedures as the relevant authority may prescribe from time to time.
(2)
Without prejudice to the generality of the foregoing, the relevant authority may close out
deals, inter alia, by buying in or selling out against a clearing member as follows:-
(a)
in case of the selling clearing members, on failure to complete delivery on the due date; and
(b)
in case of the buying clearing members, on failure to pay the amount due on the due date, and
(c)
any loss, damage or shortfall sustained or suffered as result of such closing out shall be payable by
the clearing members who failed to give due delivery or to pay amount due.
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
33
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-5
16. FAILURE TO MEET OBLIGATIONS
In the event a clearing member fails to meet obligations to the Clearing Corporation arising out of
clearing and settlement operations of admitted deals, the relevant authority may charge such interest,
impose such penalties and fines and take such disciplinary action against the clearing member as
it may determine from time to time. Any disciplinary action which the relevant authority takes
pursuant to the above shall not affect the obligations of the clearing member to the Clearing
Corporation or any remedy to which the Clearing Corporation may be entitled under applicable law.
CHAPTER VII
DEALINGS BY CLEARING MEMBERS
1.
JURISDICTION
(1)
All deals admitted by the Clearing Corporation in its Commodity Derivatives segment
for clearing and settlement shall be deemed to have been entered into in the city of Mumbai
unless provided otherwise expressly by the relevant authority.
(2)
The relevant authority may, from time to time, specify deals as subject to a particular
jurisdiction, having regard to the type or nature of the deal, the exchange on which the deal
was struck and other relevant factors.
2.
RECORD FOR EVIDENCE
The record of the Commodity Derivatives segment as maintained by a central processing unit
or a cluster of processing units or computer processing units, whether maintained in any other
manner shall constitute the agreed and authentic record in relation to any deals cleared and settled
through the Clearing Corporation. For the purposes of any disputes regarding clearing and
settlement of deals the records as maintained by the Commodity Derivatives segment shall
constitute valid evidence in any dispute or claim between the constituents and the clearing
member of the Clearing Corporation or between the clearing members of the Clearing Corporation
inter-se or between the clearing members and the Commodity Derivatives segment.
3.
CLEARING MEMBER ONLY PARTIES TO DEALS
The Clearing Corporation in its Commodity Derivatives segment does not recognise as parties
to deals any persons other than its own clearing members, and every clearing member is directly
and wholly liable in accordance with whom such clearing member has any deal for due fulfillment
of the deal or to the Commodity Derivatives segment as may be specified by the relevant
authority, whether such deal be for account of the clearing member effecting it or for account of a
constituent.
4.
ALL DEALS SUBJECT TO RULES, BYE LAWS AND REGULATIONS
All deals shall be made subject to the Rules, Bye Laws and Regulations of the Clearing
Corporation and this shall be a part of the terms and conditions of all such deals and the deals shall
be subject to the exercise by the relevant authority of the powers with respect thereto vested in it
by the Bye Laws, Rules and Regulations of the Clearing Corporation.
5.
INVIOLABILITY OF ADMITTED DEALS
(1) All the dealings in securities on the Commodity Derivatives segment of the Clearing Corporation
made subject to the Byelaws, Rules and Regulations of the Clearing Corporation shall be
inviolable and shall be cleared and settled in accordance with the Byelaws, Rules and
Regulations of the Clearing Corporation. However, the Clearing Corporation may by a notice
annul the deal(s) on an application by a Clearing Member in that behalf, if the relevant authority
is satisfied after hearing the other party/parties to the deal(s) that the deal(s) is /are fit for
annulment on account of fraud or wilful misrepresentation or material mistake in the trade.
(2) Notwithstanding anything contained in clause (1) above, the Clearing Corporation may, to
protect the interest of investors in securities and for proper regulation of the securities market,
suo-moto annul deal(s) at any time if the relevant authority is satisfied for reasons to be recorded
in writing that such deal(s) is/ are vitiated by fraud, material mistake, misrepresentation or market
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
34
or price manipulation and the like.
(3) Any annulment made pursuant to clauses (1) and (2) above, shall be final and binding upon the
parties to trade(s). In such an event, the Clearing Member shall be entitled to cancel the relevant
deal(s) with its constituents.
6.
DEALS BY REPRESENTATIVE CLEARING MEMBERS
A clearing member may authorise another clearing member to act as a representative for a
specified period with the prior permission of the relevant authority.
7.
INDEMNITY
The Clearing Corporation shall not be liable for any activity of the clearing member or any person
acting in the name of the clearing member whether authorised or unauthorised including deals
cleared and settled through the Clearing Corporation in the Commodity Derivatives segment save
and except as and to the extent provided in the Bye Laws and Regulations.
CHAPTER VIII
MARGINS
1.
MARGIN REQUIREMENTS
(1)
The relevant authority may from time to time prescribe requirements of margins for deals
cleared and settled through the Clearing Corporation in Commodity Derivatives segment and
the clearing member shall furnish such margin as a condition precedent.
(2)
Every Clearing Member has a continuing obligation to maintain margins at such levels and
during such periods as may be stipulated by the Clearing Corporation from time to time.
2.
FORM OF MARGIN
The Relevant Authority shall specify:
a.
the type, nature and composition of Collaterals that will be acceptable as Margin,
b.
the methods and formulae for calculating above Margins and,
c.
mode of remittance or their payment
d.
the time that certain Collaterals will cease to be acceptable as Margin and on the valuation to
be attributed thereto.
The Relevant Authority shall value any Collaterals provided for Margin in accordance with the
valuation methodology prescribed from time to time.
3.
QUANTUM OF MARGIN
The clearing member depositing margins, in the form of securities by way of pledge or
otherwise or in such other mode as may be prescribed by the relevant authority from time to
time, shall always maintain the value thereof at not less than the quantum of margin required for
the time being covered by them by providing further security to the satisfaction of the relevant
authority which shall determine the said value and whose valuation shall conclusively fix the
amount of any deficiency to be made up from time to time.
4.
MARGIN TO BE HELD BY THE CLEARING CORPORATION
The margins shall be held by the Clearing Corporation in the Commodity Derivatives segment
and when they are in the form of bank deposit receipts and securities such receipts and securities
may be transferred to such persons or to the name of a custodian or such other entity approved by
the Clearing Corporation. All margin deposits shall be held by the Clearing Corporation and/or
by the approved persons and/or by the approved custodian in such form and on such account
as the Clearing Corporation may deem fit solely for without any right whatsoever on the part
of the depositing clearing member or those in its right to call in question the exercise of such
discretion. The Clearing Corporation shall retain control over all Collateral as part of the margin
of the such Clearing Member.
All Collaterals provided to the Clearing Corporation as Margin shall be free of, and shall remain
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
35
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-5+
free of, any encumbrances whatsoever.
The Clearing Corporation shall not have any obligation or responsibility to preserve, protect,
collect or realise collaterals or its value other than that applicable to an ordinary and prudent
person and under no circumstances shall the Clearing Corporation be liable for any loss or
diminution in value or depreciation in or in connection with the Collaterals tendered or deposited
by the Member and maintained as above.
A Clearing Member who maintains Collaterals with the Clearing Corporation pursuant to these
Bye-Laws and the Rules shall indemnify and hold the Clearing Corporation harmless from any
loss, damage, costs, charges and /or expenses of whatsoever nature and however arising (“loss‟)
suffered or incurred by the Clearing Corporation to any approved custodian which may result
from or arise with respect to:
any act, delay or omission in connection with the Collaterals deposited with such
approved Custodian (by such Clearing Member or the Clearing Corporation) or;
any agreement between the Member and any approved Custodian or bank or any
representation, warranty or undertaking given by the Clearing Corporation to any
designated Custodian or bank in relation to or otherwise in connection with Collaterals
deposited with such approved Custodian or bank, provided that this indemnity shall not
cover any loss and/or liability of the Clearing Corporation attributable to or referable to
the gross negligence or willful misconduct of the Clearing Corporation or any of its
directors, officers employees or agents.
Each Clearing Member shall pay the Clearing Corporation all fees, expenses, charges and costs
incurred by the Clearing Corporation in relation to its acceptance and maintenance of Collaterals
specified under the Rules of the Clearing Corporation as the Relevant Authority may determine
from time to time and shall make such deposits of Margins (in such form as may be acceptable to
the Clearing Corporation) as may be required by the Clearing Corporation by reason of any
erosion or depreciation in the market value of such Collaterals.
5.
LIEN ON MARGINS
The monies paid by way of margin or bank deposit receipts or other securities or assets pledged
or hypothecated by a clearing member in lieu of margin under the provisions of the Bye Laws
and Regulations shall be subject to a first and paramount lien for all sums due to the Clearing
Corporation in the Commodity Derivatives segment. Margin shall be available in preference to
all other claims against the clearing member for the due fulfillment of his obligations and
liabilities arising out of or incidental to any deals made subject to the Bye Laws, Rules and
Regulations of the clearing corporation or anything done in pursuance thereof.
6.
UTILISATION FOR FAILURE TO MEET OBLIGATIONS
In the event a clearing member fails to meet obligations to the Clearing Corporation arising out
of clearing and settlement operations of such deals on the Commodity Derivatives segment as
provided in the Bye Laws and Regulations, the relevant authority shall be entitled to
utilise any amount paid by the said clearing member in the form of margin or any other
payment retained by the Clearing Corporation for the purpose of clearing and settlement on
the Commodity Derivatives segment. The Collaterals of a Clearing Member maintained with the
Clearing Corporation may be disposed of, without notice and in any manner deemed appropriate
by the Clearing Corporation and the proceeds from the liquidation of such Collaterals shall be
applied against the obligations of the Clearing Member to the Clearing Corporation in respect of
one or more Clearing Segments.
The Clearing Corporation may at any time combine one or more clearing accounts of the
Clearing Member with the Clearing Members’ liabilities to the Clearing Corporation and set off
and/or transfer and/or apply any funds in such account towards satisfaction of any liabilities of
the Clearing Member to the Clearing Corporation.
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
36
7.
EVASION OF MARGIN REQUIRMENTS FORBIDDEN
A clearing member shall not directly or indirectly enter into any arrangement or adopt any
procedure for the purpose of evading or assisting in the evasion of the margin requirements
prescribed under the Bye Laws and Regulations.
8.
SUSPENSION ON FAILURE TO PAY MARGIN
If a clearing member fails to pay margin as required in the Bye Laws and Regulations, the
relevant authority may take such action as it may deem fit and specified from time to time
including suspension of such Clearing Member or squaring off / close out of the Open Positions
of the Clearing Member and/or his affiliated constituents and their clients.
9.
INTEREST, DIVIDEND AND CALLS
(1) The receiving member shall be entitled to receive all vouchers, coupons, dividends, cash
bonus, bonus issues, rights and other privileges which may relate to securities bought cum
voucher, cum coupons, cum dividends, cum cash bonus, cum bonus issues, cum rights, etc.
The delivering member shall be entitled to receive all vouchers, coupons, dividends, cash
bonus, bonus issues, rights and other privileges which may relate to securities sold ex
voucher, ex coupons, ex dividends, ex cash bonus, ex bonus issues, ex rights, etc.
(2) The manner, mode, information requirements, alterations, date and timing etc., of
adjustment with respect to vouchers, coupons, dividends, cash bonus, bonus issues, rights
and other privileges between the receiving and delivering member shall be as prescribed
by the relevant authority from time to time. Save as otherwise provided in the Bye Laws and
Regulations, the clearing members shall be responsible between themselves and to their
constituents for effecting such adjustments.
(3) In respect of a deal in securities which shall become or are exchangeable for new or other
securities under a scheme of reconstruction or reorganisation, the delivering member shall
deliver to the receiving member, as the relevant authority directs, either the securities
contracted for or the equivalent in securities and/or cash and/or other property receivable under
such scheme of reconstruction or reorganisation.
10.
CLEARING FEES
The relevant authority may prescribe from time to time fees, charges and recoveries to be levied
on the clearing members in respect of clearing and settlement of deals.
CHAPTER IX
RIGHTS AND LIABILITIES OF CLEARING MEMBERS AND CONSTITUENTS
1.
MARGIN FROM CONSTITUENTS
A clearing member shall have the right to demand from its constituent the margin he has to
provide under the Rules, Bye Laws and Regulations in respect of the business done by him for
such constituent. A clearing member shall also have the right to demand an initial margin in cash
and securities from its constituent before undertaking to clear his obligations and to stipulate
that the constituent shall pay a margin or furnish additional margin as may be specified by the
Commodity Derivatives segment of the Clearing Corporation according to changes in market
prices. The constituent shall when from time to time called upon to do so forthwith pay margins
and furnish additional margins as required under the Rules, Bye Laws and Regulations in
respect of his obligations and as agreed upon by him with the clearing member concerned.
All deals done on the Clearing Corporation made by a clearing member in Commodity
Derivatives segment shall in all cases be deemed made subject to the Bye Laws, Rules and
Regulations of the Commodity Derivatives segment of the Clearing Corporation. This shall be a
part of the terms and conditions of all such contracts and shall be subject to the exercise by the
relevant authority of the powers with respect thereto vested in it by the Bye Laws, Rules and
Regulations of the Commodity Derivatives segment of the Clearing Corporation.
2.
CONSTITUENT IN DEFAULT
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
37
(1)
A clearing member shall not transact business directly or indirectly for a constituent who to
his knowledge is in default to another clearing member unless such constituent shall have
made a satisfactory arrangement with the clearing member who is his creditor.
(2)
On the application of a creditor clearing member who refers or has referred to
arbitration its claim against the defaulting constituent as provided in the Rules, Bye Laws and
Regulations, the relevant authority shall issue orders against any clearing members restraining
them from paying or delivering to the defaulting constituent any monies or securities up to an
amount or value not exceeding the creditor member's claim payable or deliverable by him to
the defaulting constituent in respect of deals subject to the Bye Laws, Rules and Regulations
of the Clearing Corporation, which moneys and securities shall be deposited with the Clearing
Corporation. The moneys and securities deposited shall be disposed of in terms of the
award in arbitration and pending a decree shall be deposited with the concerned Court
when filing the award unless the creditor clearing member and the defaulting constituent
mutually agree otherwise.
3.
CLOSING-OUT OF CONSTITUENT'S ACCOUNT
Unless otherwise prescribed by the relevant authority from time, to time, when closing-out the
account of a constituent a clearing member may assume or take over such deals to his own
account as a principal at prices which are fair and
justified by the condition of the market or he may close-out in the open market and any expense
incurred or any loss arising therefrom shall be borne by the constituent.
A Clearing Member may close out all open transactions on account of a Constituent who has died
or declared insolvent or bankrupt. A Clearing Member may close out all open transactions on
account of such a constituent.
4.
CLEARING MEMBER NOT LIABLE TO ATTEND TO REGISTRATION OF TRANSFER
Unless otherwise prescribed by the relevant authority from time to time, a clearing member shall
not be deemed to be under any obligation to attend to the transfer of securities and the
registration thereof in the name of the constituent. If it attends to such work in the ordinary
course or at the request or desire or by the consent of the constituent it shall be deemed to be the
agent of the constituent in the matter and shall not be responsible for loss in transit or for the
company's refusal to transfer or not be under any other liability or obligation other than that
specifically imposed by the Rules, Bye Laws and Regulations. The stamp duty, the transfer fees
and other charges payable to the company, the fee for attending to the registration of securities
and all incidental expenses such as postage incurred by the clearing member shall be borne by the
constituent.
5.
REGISTRATION OF SECURITIES WHEN IN THE NAME OF CLEARING MEMBER
OR NOMINEE
(1)
When the time available to the constituents of a clearing member is not sufficient for them
to complete transfers and lodge the securities for registration before the closing of the
transfer books and where the security is purchased cum interest, dividend, bonus or
rights which the company may have announced or declared, the clearing member may
register the securities in its or its nominee's name and recover the transfer fee, stamp duty and
other charges from the buying constituent.
(2)
The clearing member shall give immediate intimation to the Clearing Corporation of the
names of such constituents and details of the deals as may be specified by the relevant
authority from time to time. The clearing member shall also give immediate intimation
thereof to the buying constituent and shall stand indemnified for the consequences of any
delay in delivery caused by such action.
(3)
The clearing member shall be obliged to re-transfer the security in the name of the
original constituent as soon as it has become ex interest, dividend, bonus or rights.
6.
CLOSING-OUT BY CONSTITUENT ON FAILURE TO PERFORM A DEAL
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38
If a clearing member fails to complete the performance of a deal by delivery or payment in
accordance with provisions of the Rules, Bye Laws and Regulations the constituent shall, after
giving notice in writing to the clearing member, close out such deal through any other
clearing member as soon as possible and any loss or damages sustained as a result of such
closing out shall be immediately payable by the defaulting clearing member to the constituent.
If the closing out be not effected as provided herein, the damages between the parties shall be
determined on such basis as may be prescribed by the relevant authority from time to time
and the constituent and the clearing member shall forfeit all further rights of recourse against
each other.
7.
COMPLAINT BY CONSTITUENT
When a complaint has been lodged by a constituent with the relevant authority that any
clearing member has failed to perform his dealings, the relevant authority shall investigate
the complaint and if it is satisfied that the complaint is justified it may take such disciplinary
action as it deems fit.
8.
RELATIONSHIP BETWEEN CLEARING MEMBER AND CONSTITUENT
Without prejudice to any other law for the time being in force and subject to these Bye
Laws, the mutual rights and obligations inter se between the clearing members and their
constituents shall be such as may be prescribed by the relevant authority from time to time.
CHAPTER X
ARBITRATION
I.
All claims, disputes, differences arising between Clearing Members and Constituents or
between Clearing Members inter se arising out of or related to deals admitted for clearing and
settlement by the Clearing Corporation or with reference to anything done in respect thereto
or in pursuance of such deals shall be referred to and decided by arbitration as provided in the
Rules, Byelaws and Regulations of the Specified Exchange as if the deal originated from it or in
pursuance thereof.
II.
1. Definitions
(a)
'arbitrator' shall mean a sole arbitrator or a panel of arbitrators.
(b)
'Act' shall mean the Arbitration and Conciliation Act, 1996 and includes any statutory
modification, replacement or re-enactment thereof, for the time being in force.
2.
Reference to Arbitration
All claims, difference or disputes between the Clearing Members inter se and between Clearing
Members and Constituents arising out of or in relation to dealings, contracts and transactions
made subject to the Bye-Laws, Rules and Regulations of the Clearing Corporation or with
reference to anything incidental thereto or in pursuance thereof or relating to their validity,
construction, interpretation, fulfillment or the rights, obligations and liabilities of the parties
thereto and including any question of whether such dealings, transactions and contracts have
been entered into or not shall be submitted to arbitration in accordance with the provisions of
these Byelaws and Regulations. Provisions of these Byelaws and Regulations deemed to
form part of all dealings, contracts and transactions
3.
Provisions of these bye laws and regulations deemed to form part of all dealings,
contracts and transactions
In all dealings, contracts and transactions, which are made or deemed to be made
subject to the Byelaws, Rules and Regulations of the Clearing Corporation, the
provisions relating to arbitration as provided in these Byelaws and Regulations shall form and
shall be deemed to form part of the dealings, contracts and transactions and the parties shall be
deemed to have entered into an arbitration agreement in writing by which all claims, differences
or disputes of the nature referred to in Byelaw (2) above shall be submitted to arbitration as per
the provisions of these Byelaws and Regulations.
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39
4.
Limitation period for reference of claims, differences or disputes for arbitration
All claims, differences or disputes referred to in Bye law 2 above shall be submitted to
arbitration within the period prescribed under the Limitation Act, 1963 including any
amendment thereto.
5.
Power of the Relevant Authority to prescribe Regulations
(a) The Relevant Authority may, from time to time prescribe Regulations for the
following:
(i)
The procedure to be followed by the parties in arbitral proceedings. In particular,
and without prejudice to the generality of the foregoing power, such procedure may,
inter alia, provide for the following:
a) the forms to be used;
b) the fees to be paid;
c) the mode, manner and time period for submission of all pleadings by both the parties;
d) matters relating to requests from the parties for amending or supplementing the
pleadings; and
e) the consequences upon failure to submit such pleadings by the parties.
(ii) The procedure to be followed by the arbitrator in conducting the arbitral proceedings.
In particular, and without prejudice to the generality of the foregoing power, such
procedure may, inter alia, provide for
a) adjournment of hearings; and
b) terms and conditions subject to which the arbitrator may appoint experts to report on
specific issues and the procedure to be followed in arbitral proceedings upon such an
appointment.
c) passing interim orders/directions if deemed fit.
(iii) Different set of arbitration procedures for different claims, differences or disputes
after taking into consideration such circumstances and facts as the Relevant Authority
may deem fit, which circumstances and facts may include the value of the subject
matter and the persons who are involved as parties to such claims, differences or
disputes.
(iv) Creation of seats of arbitration for different regions or prescribing geographical
locations for conducting arbitrations and prescribing the courts which shall have
jurisdiction for the purpose of the Act.
(v)
The claims, differences or disputes which may be referred to a sole arbitrator and the
claims, differences or disputes which may be referred to a panel of arbitrators.
(vi) The procedure for selection of persons eligible to act as arbitrators.
(vii) The procedure for appointment of arbitrator.
(viii) The terms, conditions and qualifications subject to which any arbitrator may be
appointed.
(ix) Determination of the number of arbitrators in the case of a panel of arbitrators.
(x) The time period within which a substitute arbitrator has to be appointed in case the
office of the arbitrator falls vacant for any reason whatsoever.
(xi) The matters to be disclosed by any person who is approached in connection
with his possible appointment as an arbitrator.
(xii) The procedure to be adopted by the parties for challenging the appointment of an
arbitrator.
(xiii)(a) The claims, differences or disputes which, may be decided by the arbitrator
without a hearing unless either party in writing requests the Relevant Authority for a
hearing and the time period within which such a request shall be made.
(b)
The claims, differences or disputes which, may be decided by the arbitrator only
by hearing the parties unless both the parties jointly waive the right to such hearing
and the time period within which such a waiver shall be made.
(xiv)The place of arbitration for each reference and the places where the arbitrator can
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40
meet for consultation, for hearing witnesses, experts, or the parties, or for inspection
of documents, goods or other property.
(xv) The making of the arbitral award including the manner in which a decision is to be
taken in the case of panel of arbitrators and the form and contents of the arbitral
award. The term arbitral award shall also include an arbitral award on agreed
terms. Prescriptions as to the contents of the arbitral award may include provisions for
costs and where the arbitral award is for the payment of money, may include
interest payable on principal sum due.
(xvi)The amount of deposit or supplementary deposit, as the case may be, as an
advance for the costs which it expects will be incurred in respect of the claim,
difference or dispute; provided where a counterclaim is submitted to the arbitrator, a
separate amount of deposit for the counter- claim may also be prescribed.
(xvii) The administrative assistance which the Clearing Corporation may render in order
to facilitate the conduct of arbitral proceedings.
(xviii)All matters regarding the mode and the manner of service of notices and
communications by the parties including communication addressed to arbitrator.
(xix) Any other matter which in the opinion of the Relevant Authority is required to be
dealt with in the Regulations to facilitate arbitration.
(b)
The Relevant Authority from time to time may amend, modify, alter, repeal, or add to
the provisions of the Regulations.
6.
Disclosure by persons to be appointed as arbitrators
Every person who is approached in connection with his possible appointment as an
arbitrator shall disclose to the Relevant Authority in writing any circumstances likely to give
rise to justifiable doubts as to his independence and impartiality. If the person discloses
any circumstances which in the opinion of the Relevant Authority are likely to give rise to
justifiable doubts as to his independence and impartiality, then he shall not be appointed as
an arbitrator.
7.
Disclosure by persons appointed as arbitrators
An arbitrator, from the time of his appointment and throughout the arbitral proceedings,
shall, without delay, disclose to the Relevant Authority in writing any circumstances
referred to in Byelaw (6) above which have come to his knowledge after his appointment as
an arbitrator.
8.
Termination of mandate of the arbitrator
The mandate of the arbitrator shall terminate if
(a) the arbitrator withdraws from office for any reason; or
(b) in the opinion of the Relevant Authority, the arbitrator becomes de jure or de facto unable
to perform his functions or for other reasons fails to act without undue delay
including failure to make the arbitral award within the time period prescribed by the
Relevant Authority. Such a decision of the Relevant Authority shall be final and binding
on the parties; or
(c) the mandate of the arbitrator is terminated by the Relevant Authority upon receipt of
written request for the termination of the mandate of the arbitrator from both the parties to
arbitration; or
(d) the arbitrator discloses any circumstances referred to in Byelaws (6) and (7) which in the
opinion of the Relevant Authority are likely to give rise to justifiable doubts as to his
independence and impartiality; or
(e) the arbitral proceedings are terminated as provided for herein.
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
41
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-6
9.
Supplying of vacancy to the office of the arbitrator
At any time before the making of the arbitral award should the office of the
arbitrator f all vacant for any reason whatsoever including any vacancy due to the
illness or death of the arbitrator or termination of the mandate of the arbitrator by the
Relevant Authority or otherwise, the vacancy shall be supplied by the Relevant
Authority by following the same procedure as specified by it for appointment of the
arbitrator.
10. Consideration of recorded proceedings and evidence
Unless otherwise agreed by parties, any arbitrator who has been appointed by the
Relevant Authority to supply a vacancy to the office of the arbitrator may repeat any
hearings previously held.
11. Order or ruling of previous arbitrator not invalid
An order or ruling of the arbitrator made prior to the termination of his mandate shall not
be invalid solely because his mandate has been terminated; provided that when the
termination has been effected pursuant to Byelaw (8)(d), the order or ruling of the arbitrator
made prior to termination of his mandate shall become invalid unless otherwise agreed
upon by the parties.
12. Interim arbitral award and interim measures ordered by the arbitrator
The arbitrator may be empowered to make an interim arbitral award as well as to provide
interim measures of protection. An arbitrator may require a party to provide appropriate
security in connection with an interim measure.
13. Appearance in arbitral proceedings by counsel, attorney or advocate
In arbitral proceedings where both the parties are Clearing Members, the parties
shall not be permitted to appear by counsel, attorney or advocate but where one of the
parties is a Constituent, and then the Constituent shall be permitted to appear by counsel,
attorney or advocate. If the Constituent chooses to appear by counsel, attorney or
advocate, then the Clearing Member shall be granted a similar privilege.
14. EXPEDITIOUS DISPOSAL OF ARBITRATION CASES
(a) Time for appointment of Arbitrator
Where an arbitration application is made, the appointment of arbitrator or panel of
arbitrators, shall be completed within thirty days of receipt of the application.
(b) Adjournment
Adjournment, if any, shall be granted by the arbitrator only in exceptional cases, for
bonafide reasons to be recorded in writing.
(c) Time for Completion of Arbitration
The arbitrator(s) shall conclude the arbitration reference within four months from the
date of their appointment, by issuance of an arbitral award.
(d) Request for extension
The time for making an arbitral award may be extended for a total period not
exceeding two months by Relevant Authority on an application by either party or
the arbitrator(s), for sufficient cause to be recorded in writing.
15. Implementation of Arbitral Award
Notwithstanding anything contained in the Bye-laws, in cases where the arbitral award or
appellate arbitral award is passed against the Clearing Member and in favour of a
Constituent, the Clearing Corporation shall debit from the deposits or other monies
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42
of the Clearing Member lying with the Clearing Corporation, the amount of award
payable to the awardee together with interest payable, if any, till the date of debit after
setting off the counter claim of the Clearing Member and /or its Constituent allowed under
the award, if any, and keep aside the said amount in a separate account to be dealt with in
such manner as mentioned in Bye-laws II(16B) and II(17) of Chapter X.
Provided however, where the award is for the delivery of securities, the Clearing
Corporation may consider the closing price of such securities on the Specified Exchange
as on the date of the award or such other date as the Relevant Authority may specify to
be reasonable, stating reasons for arriving at the value of such securities and award amount.
16. Payment of Debited Amount
(a) Arbitral Award:- Where the Clearing Member chose not to prefer an appeal
under Bye-law 19 within the time permissible there under, the amount debited under
Bye-law 15 shall be paid, together with the interest earned thereon, to the awardee.
(b) Appellate Arbitral Award:- Where an appeal is preferred by the Clearing Member
under Bye-law II(22) and the appellate arbitral tribunal makes an appellate arbitral
award against the Clearing Member the Clearing Corporation shall pay the
awarded amount to the awardee from the amount debited under Bye-law II(15):-
(i) where no application is made by the Clearing Member under Section 34 of
the Arbitration and Conciliation Act, 1996 to challenge such arbitral award
within the limitation period for making such application, upon expiry of such
limitation period;
(ii) where such an application is made by the Clearing Member, and no stay is
granted by the court within three months from the date of receipt of
appellate arbitral award by him, upon completion of such three months;
(iii) in any other case, upon dismissal of the application by the court.]
17. Reversal of Debit in Certain Cases
Where the arbitral award or the appellate arbitral award against the Clearing Member has
been set aside or has been modified by reduction of awarded amount, and such setting aside
or modification has attained finality, the Clearing Corporation may reverse the debit, in full
or in part, as the case may be, and pay the reduced amount, if any, to the awardee.
18. Arbitration proceedings subject to the provisions of the Act
The arbitration proceedings as provided for by the provisions of these Byelaws and
Regulations shall be subject to the provisions of the Act to the extent not provided for in
these Byelaws or the Regulations.
19. Construction of references
For the purposes of section 2(6) of the Act, in all claims, differences or disputes which are
required to be submitted to arbitration as per the provisions of these Byelaws and the
Regulations, wherever Part A of the Act leaves the parties free to determine a certain issue,
the parties shall be deemed to have authorised the Relevant Authority to determine that
issue.
20. Administrative assistance
For the purpose of section 6 of the Act, in all claims, differences or disputes which are
required to be submitted to arbitration as per the provisions of these Byelaws and
Regulations, the parties shall be deemed to have arranged for administrative assistance of the
Relevant Authority in order to facilitate the conduct of the arbitral proceedings.
21. Jurisdiction
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43
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-7
All parties to a reference to arbitration under these Byelaws and Regulations and the
persons, if any, claiming under them, shall be deemed to have submitted to the exclusive
jurisdiction of the courts in Mumbai or any other court as may be prescribed by the
Relevant Authority for the purpose of giving effect to the provisions of the Act.
22. Appellate Arbitration
Any party aggrieved by an arbitral award made under these Bye-laws shall have a right of
appeal, in terms of the following:-
(a)
A party aggrieved by an arbitral award may appeal against such award to the
appellate panel of arbitrators to be constituted by the Clearing Corporation within
one month from the date of receipt of arbitral award.
(b)
The Relevant Authority shall thereupon constitute an appellate panel consisting
of three arbitrators who shall be different from the ones who passed the arbitral
award appealed against.
(c)
Such constitution of appellate panel of arbitrators shall be completed by Relevant
Authority within thirty days from the date of receipt of the appeal.
(d)
The appeal shall be disposed of within three months from the date of appointment of
appellate panel of arbitrators, through issuance of an appellate arbitral award.
(e)
The time for making an appellate arbitral award may be extended for a total period not
exceeding two months by the Relevant Authority on an application by either party or
the appellate panel of arbitrators, for sufficient cause to be recorded in writing.
(f)
A party aggrieved by the appellate arbitral award may file an application to the
Court of competent jurisdiction to challenge the appellate award in accordance with
Section 34 of the Arbitration and Conciliation Act, 1996.
(g)
Except where specific provision is made in this Bye-law, the provisions of Bye-
laws II(4) to II(21) and the Regulations shall, so far as may be, apply to appellate
arbitrators, appellate arbitration proceedings and appellate arbitral award.
III.
The provisions of Byelaws (I) & (II) shall become applicable to all claims, differences, disputes
between the parties mentioned therein for all dealings, contracts and transactions admitted for
clearing and settlement on the Clearing Corporation in respect of Commodity Derivative
Segment and made subject to the byelaws, rules and regulations provided such dealings,
contracts and transactions had been entered into between the parties mentioned therein prior to or
to the date on which the Clearing Member was either declared a defaulter or expelled or has
surrendered his trading membership.
CHAPTER XI
DEFAULT
1.
DECLARATION OF DEFAULT
A clearing member may be declared a defaulter by direction/circular/notification of the relevant
authority of the segment if:
(1)
he is unable to fulfill his clearing or settlement obligations; or
(2)
he admits or discloses his inability to fulfill or discharge his duties, obligations
and liabilities; or
(3)
the Clearing Member fails to make any payment required to be made under or pursuant
to these Bye-Laws Rules and the Regulations or Circulars issued by the Relevant
Authority from time to time. Payments may include without limitation any payment
towards the Clearing Members’ Pay-in obligations in respect of any of the Clearing
Segments to which it has been admitted, fees, transaction charges, fines or its clearing
and settlement obligations relating to any of the Clearing Segments including delivery of
the underlying relating to a Security, security deposit, Margins, Daily Settlement
Amount, Final Settlement Amount, contribution to the Settlement Guarantee Fund, or
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
44
any other dues to the Clearing Corporation, SEBI or any other Statutory agency;
(4)
the Clearing Member fails to make a valid delivery of the underlying asset at the time
and place specified by the Relevant Authority or take delivery of the underlying asset
relating to performance of a Deliverable Contract, or for the purpose of satisfying its
Clearing and Settlement obligations with respect to any of the Clearing segments of the
Clearing Corporation to which the Clearing Member is admitted;
(5)
the Clearing Member is in violation of its Membership undertaking given to Clearing
Corporation
(6)
the Clearing Member defaults on any other obligation under these Bye-Laws and the
Regulations made thereunder and the Rules of the Clearing Corporation which, if
capable of being remedied, is not remedied to the satisfaction of the Relevant Authority
within the time specified by the Relevant Authority for such rectification;
(7)
an application, in any jurisdiction, is filed or an order made for the winding up,
dissolution, bankruptcy, management or administration of the Clearing Member or
similar events or an assignment or composition is made by the Clearing Member for the
benefit of its creditor(s);
(8)
any representation, warranty or document made or submitted by a Clearing Member in its
Membership application was known to the Clearing Member to be wrong or false or has
become false in any material respect;
(9)
the Clearing Member or any of its Principal officers, employees, contractors, agents,
representatives or Clients, is in violation of an applicable law or regulation governing its
business and affairs;
(10)
the Clearing Member or any of its employees or agents is charged in any court of law in
connection with an offence involving fraud or dishonesty, whether within or outside
India;
(11)
he fails or is unable to pay within the specified time the damages and the money
difference due on a closing-out effected against him under the Rules, Bye Laws and
Regulations; or
(12)
he fails to pay any sum due to the Clearing Corporation as the relevant authority may
from time to time prescribe; or
(13)
he fails to pay or deliver all moneys, securities and other assets due to a clearing member
who has been declared a defaulter within such time of declaration of default of such
clearing member in such manner and to such person as the relevant authority may
direct; or
(14)
he fails to abide by the arbitration award as laid down under the Rules, Bye Laws and
Regulations; or
(15)
the Clearing Member (or any of the Clearing Member’s officers, employees, Clients,
contractors, agents,) is in violation or deemed violation of any of these Bye-Laws,
Regulations and the Rules in respect of any of the Clearing Segments to which the
Clearing Member has been admitted;
(16)
any similar event that would affect the business and the financial condition of the
Clearing Member (including its ability to pay debts as and when they fall due) and its
affairs with the Clearing Corporation, or
(17)
If he, being an individual and/ or Partnership firm, has been adjudicated as an
insolvent or it, being a Company incorporated under the Companies Act, has been
ordered to be wound up by a court of law in the petition filed by any of his creditors, as
the case may be, he/ it shall ipso facto be declared a defaulter though he/ it may not
have at the same time defaulted on any of his/ its obligations on the Clearing
Corporation.
(18)
If he, being an individual and/ or Partnership firm, / it, being a Company incorporated
under the Companies Act, files a petition before a Court of law for adjudication of
himself as an insolvent or for its winding up, as the case may be, he/ it shall ipso facto
be declared a defaulter though he/ it may not have at the same time defaulted on any
of his/ its obligations on the Clearing Corporation.
(19)
under any other circumstances as may be decided by the relevant authority
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
45
from time to time.
2.
Where the clearing member is declared defaulter on any Clearing Segment of the
Clearing Corporation, he shall also be immediately declared defaulter on all other
Clearing Segments of the Clearing Corporation in which he may hold membership.
3.
Without prejudice to the foregoing provisions contained in Byelaw (1) of this chapter, where a
clearing member, who is also a member/ trading member of any of the recognised Stock
Exchanges or a clearing member of any clearing corporation, is declared a defaulter by such Stock
Exchange or clearing corporation, the said clearing member shall ipso facto stand declared a
defaulter by the Relevant Authority across all the Clearing Segments.
4.
On a clearing member being declared defaulter, the relevant authority may take appropriate
action against the associates of such defaulter member.
Explanation 1: For the purpose of this Bye-law, the term “associate “shall
include a person, -
a.
who, directly or indirectly, by itself, or in combination with other persons, exercises control
over the member, whether individual, body corporate or firm or holds substantial share of
not less than 15% in the capital of such member; or
b.
in respect of whom the member, individual or body corporate or firm, directly or
indirectly, by itself or in combination with other persons, exercises control; or
c.
whose director or partner is also a director or partner of the member, body
corporate or the firm, as the case may be.
Explanation 2: The expression “control" shall have the same meaning as d defined in clause
(c) of sub-regulation (1) of regulation 2 of the SEBI (Substantial Acquisition of Shares
and Takeovers) Regulations, 1997.
5.
Notwithstanding anything contained in the Byelaws and Rules of Clearing Corporation, if a
clearing member is an Associate of a member/ trading member declared a defaulter by any
recognised stock exchange, the said clearing member shall render itself liable to be declared a
defaulter by the Relevant Authority
Explanation: The expression „Associate‟ for the purpose of the above Byelaw shall have the
meaning as may be defined by SEBI from time to time.”
6.
CLEARING MEMBER’S DUTY TO INFORM
A clearing member shall be bound to notify the Clearing Corporation immediately if there be a
failure by any clearing member to discharge his liabilities in full.
7.
COMPROMISE FORBIDDEN
A clearing member shall not accept from any clearing member any thing less than a full and
bona fide money payment in settlement of a debt arising out of a deal cleared through the
Clearing Corporation.
8.
NOTICE OF DECLARATION OF DEFAULT
On a clearing member being declared a defaulter, a notice shall be forthwith issued to all the
clearing members of the Clearing Corporation.
5.
NOTICE TO THE STOCK EXCHANGE
On a clearing member being declared a defaulter, a notice shall be forthwith issued to the
Exchange if the clearing member is also a trading member of that Exchange.
9.
DEFAULTER’S BOOKS AND DOCUMENTS
When a clearing member has been declared a defaulter the relevant authority
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
46
shall take charge of all his books of accounts, documents, papers and vouchers to ascertain the
state of his affairs and the defaulter shall hand over such books, documents, papers and vouchers
to the relevant authority.
10.
LIST OF DEBTORS AND CREDITORS
The defaulter shall file with the relevant authority within such time of the declaration of his
default as the relevant authority may direct, a written statement containing the complete list of
his debtors and creditors and the sum owed by and to each.
11.
DEFAULTER TO GIVE INFORMATION
The defaulter shall submit to the relevant authority such statement of accounts, information and
particulars of his affairs as the relevant authority may from time to time require and if so desired
shall appear before the relevant authority at its meetings held in connection with his default.
12.
INQUIRY
The relevant authority may conduct a strict inquiry into the accounts and dealings of the
defaulter in the market and shall report anything improper, un- businesslike or unbecoming a
clearing member in connection therewith which may come to its knowledge.
13.
DEFAULTER’S ASSETS
The relevant authority shall call in and realise the security deposits in any form, margin money,
other amounts lying to the credit of and securities deposited by the defaulter and recover all
moneys, securities and other assets due, payable or deliverable to the defaulter by any other
Clearing Member in respect of any deal or dealing made subject to the Bye-laws, Rules and
Regulations of the Clearing Corporation and such assets shall vest ipso facto, on declaration of
any clearing member as a defaulter, in the Clearing Corporation for the benefit of and on account
of the Clearing Corporation, Exchange , Securities and Exchange Board of India, other clearing
members, Constituents of the defaulter, approved banks and any other persons as may be
approved by the relevant authority and other recognised stock exchanges / clearing corporation.
14.
PAYMENT TO RELEVANT AUTHORITY
(1)
All monies, securities and other assets due, payable or deliverable to the defaulter must
be paid or delivered to the relevant authority within such time of the declaration of
default as the relevant authority may direct. A clearing member violating this provision
may be declared a defaulter.
(2)
A clearing member who shall have received a difference on account or shall have
received any consideration in any deal prior to the date fixed for settling such account
or deal shall, in the event of the clearing member from whom he received such
difference or consideration being declared a defaulter, refund the same to the relevant
authority for the benefit and on account of the creditor members. Any clearing
member who shall have paid or given such difference or consideration to any
other clearing member prior to such settlement day shall again pay or give the same
to the relevant authority for the benefit and on account of the creditor member in the
event of the default of such other member.
(3)
A clearing member who receives from another clearing member during any clearing a
claim note or credit note representing a sum other than difference due to him or due to
his constituent which amount is to be received by him on behalf and for the account
of that constituent shall refund such sum if such other clearing member be declared
a defaulter within such number of days as prescribed by the relevant authority after the
settling day. Such refunds shall be made to the relevant authority for the benefit and on
account of the creditor members and it shall be applied in liquidation of the claims of
such creditor members whose claims are admitted in accordance with the Rules, Bye
Laws and Regulations.
15.
DISTRIBUTION
The relevant authority shall at the risk and cost of the creditor members pay all assets received in
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
47
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-8
the course of realisation into such bank and/or keep them with the Clearing Corporation in such
names as the relevant authority may from time to time direct and shall distribute the same in
accordance with the Rules, Bye Laws and Regulations.
16.
CLOSING -OUT
(1)
Clearing members having open deals with the defaulter shall close out such deals
after declaration of default. Such closing out shall be in such manner as may be
prescribed by the relevant authority from time to time. Subject to the regulations in this
regard prescribed by the relevant authority, when in the opinion of the relevant
authority, circumstances so warrant, such closing out shall be deemed to have taken
place in such manner as may be determined by the relevant authority.
(2)
Differences arising from the above adjustments of closing out shall be claimed from
the defaulter or paid to the relevant authority for the benefit of creditor clearing members
of the defaulter.
17.
CLAIMS AGAINST DEFAULTER
Within such time of the declaration of default as the relevant authority may direct every
clearing member carrying on business on the Clearing Corporation shall, as it may be required to
do, either compare with the relevant authority his accounts with the defaulter duly adjusted and
made up as provided in the Rules, Bye-Laws and Regulations or furnish a statement of such
accounts with the defaulter in such form or forms as the relevant authority may prescribe or
render a certificate that he has no such account.
18.
DELAY IN COMPARISON OR SUBMISSION OF ACCOUNTS
Any clearing member failing to compare his accounts or send a statement or certificate
relating to a defaulter within the time prescribed shall be called upon to compare his accounts
or send such statement or certificate within such further time as may be specified.
19.
PENALTY FOR FAILURE TO COMPARE OR SUBMIT ACCOUNTS
The relevant authority may take such action as it may deem fit including levying of fine and
suspension on any clearing member who fails to compare his accounts or submit a
statement of its account with the defaulter or a certificate that he has no such account within the
prescribed time.
20.
MISLEADING STATEMENT
The relevant authority may take such action as it may deem fit including levying of fine and
suspension, if it is satisfied that any comparison statement or certificate relating to a defaulter
sent by such clearing member was false or misleading.
21.
ACCOUNTS OF RELEVANT AUTHORITY
The relevant authority shall keep a separate account in respect of all monies, securities and other
assets payable to a defaulter which are received by it and shall defray therefrom all costs,
charges and expenses incurred in or about the collection of such assets or in or about any
proceedings it takes in connection with the default.
22.
Report
The Defaulters' Committee shall every six months present a report to the relevant authority
relating to the affairs of a defaulter and shall show the assets realised, the liabilities discharged
and dividends given.
23.
Inspection of Accounts
All accounts kept by the Defaulters' Committee in accordance with these Bye Laws, Rules and
Regulations shall be open to inspection by any creditor clearing member.
24.
Scale of Charges
The charges to be paid to the Clearing Corporation on the assets collected shall be such sum as
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
48
the relevant authority may from time to time prescribe.
25.
APPLICATION OF ASSETS
The relevant authority shall apply the net assets remaining in its hands after defraying all such
costs, charges and expenses as are allowed under the Rules, Byelaws and Regulations to be
incurred by the Clearing Corporation, in satisfying the claims in the order of priority
provided hereunder
(a)
Dues to the Clearing Corporation, Concerned Exchange , Securities and
Exchange Board of India The payment of such subscriptions, debts, fines, fees,
charges and other moneys due to Clearing Corporation, Concerned Exchange and
Securities and Exchange Board of India, in the order in which their names appear
herein.
(b)
Dues to other Clearing Members and to constituents of the defaulter:
The payments as may be admitted by the relevant authority, as being due to other
Clearing members and constituents of the defaulter for debts, liabilities, obligations
and claims arising out of any contracts made by the defaulter subject to the Rules,
Bye- laws and Regulations of the Clearing Corporation, provided that if the amount is
insufficient then the amounts shall be distributed prorata amongst other clearing
members and all the constituents of the defaulter. The other Clearing members
shall in turn share the amount so received with their Constituents on pro rata
basis.
(c)
Dues to the Approved Banks and claims of any other persons as approved by
the Relevant Authority: After making payments under (b) above, the amounts
remaining, if any, shall be utilised to meet the
claims of the approved banks and of any other person as may be admitted by the
Relevant Authority. The claims of the approved banks should have arisen by virtue
of Clearing Corporation or Concerned Exchange invoking any bank guarantee
issued by the bank concerned to the Clearing Corporation or Concerned Exchange
as the case may be on behalf of the defaulter to fulfill his obligation of submitting
bank guarantee, guaranteeing discharge of obligations under the Byelaws, Rules and
Regulations of Clearing Corporation / Concerned Exchange. The claims of other
persons should have arisen out of or incidental to the clearing and settlement of a deal
on the Clearing Corporation or requirements laid down by the Clearing Corporation,
provided that if the amount available be insufficient to pay all such claims in full,
they shall be paid pro rata.
(d)
Dues to any other recognized stock exchange/clearing corporation: After meeting
the claims under (c) above, the remaining amounts, if any, shall be disbursed to
any other recognised stock exchange / clearing corporation for the purpose of
meeting the obligations of the defaulter as a member of that exchange/clearing
corporation. If the defaulter is a member of more than one recognised stock
exchange/clearing corporation, then the remaining amounts shall be distributed
amongst all such recognized stock exchanges / clearing corporations and if the
remaining amount is insufficient to meet the claims of all such stock
exchanges/clearing corporations, then the remaining amount shall be distributed pro
rata among all such stock exchanges.
(e)
Surplus: The surplus amounts, if any, remaining after meeting all the above claims,
shall be paid to the Clearing Member and in case where the Clearing member has
expired, the surplus amount shall be paid to his legal heirs / legal representatives.
26.
CERTAIN CLAIMS NOT TO BE ENTERTAINED
The relevant authority shall not entertain any claim against a defaulter –
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
49
¦ÉÉMÉ nùÉäxÉ (ºÉÆEòÒhÉÇ)-8+
(1)
which arises out of a contract in securities, dealings in which are not permitted or
which are not made subject to Bye Laws, Rules and Regulations of the Clearing
Corporation or in which the claimant has either not paid himself or colluded with
the defaulter in evasion of margin payable on bargains in any security;
(2)
which arises out of a contract in respect of which comparison of accounts has not been
made in the manner prescribed in the Rules, Bye Laws and Regulations or when there
has been no comparison if a contract note in respect of such deals has not been rendered
as provided in the Rules, Bye Laws and Regulations;
(3)
which arises from any arrangement for settlement of claims in lieu of bonafide
money payment in full on the day when such claims become due;
(4)
which is in respect of a loan with or without security;
(5)
which is not filed with the relevant authority within such time of date of declaration of
default as may be prescribed by the relevant authority.
27.
CLAIMS OF RELEVANT AUTHORITY
A claim of a defaulter whose estate is represented by the relevant authority against another
defaulter shall not have any priority over the claims of other creditor clearing members but shall
rank with other claims.
28.
ASSIGNMENT OF CLAIMS ON DEFAULTER’S ESTATE
A Clearing member being a creditor of a defaulter shall not sell, assign or pledge the claim on the
estate of such defaulter without the consent of the relevant authority.
29.
PROCEEDINGS IN THE NAME OF OR AGAINST DEFAULTER
The Relevant Authority shall be empowered to (a) initiate any proceedings in a court of law
either in the name of the Clearing Corporation or in the name of the defaulter against any person
for the purpose of recovering any amounts due to the defaulter (b) initiate any proceedings in a
court of law either in the name of Clearing Corporation or in the name of the creditors (who have
become creditors of the defaulter as a result of deals cleared and settled subject to Byelaws, Rules
and Regulations of the Clearing Corporation) of the defaulter against the defaulter for the
purpose of recovering any amounts due from the defaulter. The defaulter as well as the creditors
of the defaulter shall be deemed to have appointed the Clearing Corporation as their constituted
attorney for the purpose of taking such proceedings.
30.
PAYMENT OF RELEVANT AUTHORITY
If any clearing member takes any proceedings in a court of law against a defaulter
whether during the period of its default or subsequent to its re- admission to enforce any claim
against the defaulter's estate arising out of any admitted deals in the market made subject to the
Bye Laws, Rules and Regulations of the Clearing Corporation before it was declared a defaulter
and obtains a decree and recovers any sum of money thereon, it shall pay such amount or any
portion thereof as may be fixed by the relevant authority for the benefit and on account of the
creditor members having claims against such defaulter.
CHAPTER XII
CORE SETTLEMENT GUARANTEE FUND
1. OBJECTIVE OF THE CORE SETTLEMENT GUARANTEE FUND (CSGF)
The Clearing Corporation shall have a fund called Core Settlement Guarantee Fund (CSGF) for each clearing
segment with respect to each segment of the Specified Exchange to guarantee the settlement of trades executed in
the respective segment of the Specified Stock Exchange. In the event a Clearing Member fails to fulfil the
settlement obligations, the CSGF shall be used to fulfil the settlement obligations of the Clearing Member and
complete the settlement without affecting the normal settlement process.
2. CORPUS OF THE CSGF
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
50
(1) The corpus of the CSGF shall be adequate to meet out all the contingencies arising on account of failure of any
Clearing Member(s).
(2) The quantum of the corpus of the CSGF shall be determined by taking into consideration the risk or liability to
the CSGF on account of various factors including trade volume, delivery percentage, maximum settlement liability
of the Clearing Members, the history of defaults of the Clearing Members, capital adequacy of the Clearing
Members and the degree of safety measures employed by the Clearing Corporation. In order to assess the fair
quantum of the corpus of the CSGF, the Clearing Corporation shall consider the following factors:
a) Risk management system in force
b) Current and projected volume/turnover to be cleared and settled by the Clearing Corporation on guaranteed basis
c) Track record of defaults of the Clearing Members (number of defaults and amount in default of the Clearing
Members)
3. MINIMUM REQUIRED CORPUS OF THE CSGF
The Relevant Authority shall specify from time to time the Minimum Required Corpus (MRC) of the CSGF for
each clearing segment of the Clearing Corporation with respect to each segment of the Specified Exchange in
accordance with the norms prescribed by SEBI from time to time.
4. CONSTITUTION OF THE CORPUS OF CSGF
The corpus of CSGF shall consist of the following:
a) Contributions of various contributors:
The contributions of various contributors to the CSGF at any point of time shall be as follows:
i. Clearing Corporation’s contribution: The Clearing Corporation’s contribution to CSGF shall be at least
50% of the MRC. The Clearing Corporation shall make this contribution from its own funds. The Clearing
Corporation’s contribution to CSGF shall be considered as part of its net worth.
ii. Specified Exchange’s contribution: The Specified Exchange’s contribution to CSGF shall be at least 25% of the
MRC of each Clearing segment.
iii. Clearing Member’s primary contribution: The Clearing Corporation may seek risk based contribution from
Clearing Members of the clearing segment to the CSGF subject to the following conditions:
• The total contribution from the Clearing Members shall not be more than 25% of the MRC. Such contribution
shall ordinarily be in the form of cash contribution to CSGF. However, the Clearing Corporation may accept the
Clearing Member’s contribution in the form of bank fixed deposits in accordance with the norms prescribed by
SEBI from time to time.
• No exposure shall be available on CSGF contribution of any Clearing Member. For this purpose, the exposure-free
collateral of the Clearing Member available with the Clearing Corporation can be considered towards CSGF
contribution of the Clearing Member.
• The required contribution of each Clearing Member shall be pro-rata based on the risk that they bring to the
system.
• The Clearing Corporation shall have the flexibility to collect the Clearing Member’s primary contribution either
upfront or staggered over a period of time. In case of staggered contribution, the remaining balance shall be met by
the Clearing Corporation to ensure adequacy of total CSGF corpus at all times. Such Clearing Corporation
contribution shall be available to the Clearing Corporation for withdrawal as and when further contributions from
the Clearing Members are received.
b) Any penalties levied by the Clearing Corporation (as per Regulation 32 of SECC Regulations.)
c) Interest on cash contribution to CSGF shall accrue to the CSGF and pro-rata attributed to the contributors in
proportion to their cash contribution.
5. MANAGEMENT OF CSGF
(1) The Relevant Authority shall constitute a committee to conduct and l manage the CSGF.
(2) The Clearing Corporation shall follow prudential norms of investment policy for the CSGF corpus and establish
and implement policies and procedures to ensure that the CSGF corpus is invested in accordance with the
investment norms prescribed by SEBI from time to time.
6. ACCESS TO CSGF
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
51
The Clearing Corporation may utilise the CSGF in the event of a failure of the Clearing Members to fulfil their
settlement obligations.
7. FURTHER CONTRIBUTION TO / RECOUPMENT OF CSGF
(1) The requisite contributions to the CSGF by various contributors for any month shall be made by the contributors
before start of the month.
(2) The Clearing Corporation shall review and determine by 15th of every month the adequacy of contributions
made by various contributors as above and call for any further contributions to the CSGF as may be required to be
made by various contributors for the next month.
(3) In the event of usage of the CSGF during a calendar month, the contributors shall, as per usage of their
individual contribution, immediately replenish the CSGF to MRC.
(4) In case there is failure on part of some contributor(s) to replenish its (their) contribution, the same shall be
immediately met, on a temporary basis during the month, in the following order:
a) By Clearing Corporation
b) By Specified Exchange
8. DEFAULT WATERFALL
The Default waterfall shall become applicable only in case the Clearing Member is declared a defaulter after
appropriation of the monies of the defaulting Clearing Member.
The default waterfall of the Clearing Corporation for any clearing segment shall generally follow the following
order –
a) Monies of the defaulting Clearing Member (including the defaulting Clearing Member's primary contribution to
the CSGF(s) and excess monies of the defaulting Clearing Member in other clearing segments.)
b) Insurance, if any.
c) Clearing Corporation resources (equal to 5% of the clearing segment MRC).
d) CSGF of the clearing segment in the following order:
i. Penalties
ii. Clearing Corporation’s contribution to the extent of at least 25% of the clearing segment MRC
iii. Remaining CSGF: Clearing Corporation’s contribution, Specified Exchange’s contribution and non-defaulting
Clearing Members’ primary contribution to CSGF on pro-rata basis.
e) Proportion of remaining Clearing Corporation resources (excluding Clearing Corporation’s contribution to
CSGFs of other clearing segments and INR 100 Crore) equal to ratio of clearing segment MRC to sum of MRCs of
all clearing segments.*
f) Clearing Corporation/Specified Exchange contribution to CSGF of other clearing segments (after meeting
obligations of those clearing segments) and remaining Clearing Corporation resources to that extent as approved by
SEBI.
g) Capped additional contribution by non-defaulting Clearing Members of the clearing segment.**
h) Any remaining loss to be covered by way of pro-rata haircut to pay-outs. ***
Explanation
1. * INR 100 Crore to be excluded only when remaining Clearing Corporation resources (excluding Clearing
Corporation contribution to CSGFs of other clearing segments) are more than INR 100 Crore.
2. **Clearing Corporation shall limit the liability of non-defaulting Clearing Members towards additional
contribution to a multiple of their required primary contribution to CSGF and the framework regarding the same
shall be disclosed. In case of shortfall in recovery of assessed amounts from non-defaulting Clearing Members,
further loss can be allocated to layer 'f' with approval of SEBI.
3. ***In case loss allocation is effected through haircut to payouts, any subsequent usage of funds shall be with
prior SEBI approval. Further, any exit by Clearing Corporation post using this layer shall be as per the terms
decided by SEBI in public interest.
9. STRESS TESTING AND BACK TESTING
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MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
52
The Clearing Corporation shall conduct stress tests for credit risk, liquidity stress test, reverse stress test, back
testing for adequacy of margins and such other tests as may be appropriate in accordance with the norms prescribed
by SEBI from time to time.
CHAPTER XIII
MISCELLANEOUS
1.
Save as otherwise specifically provided in the Bye Laws and Regulations prescribed by
the relevant authority regarding clearing and settlement arrangement, in promoting, facilitating,
assisting, regulating, managing and operating the Clearing Corporation, the Clearing Corporation
should not be deemed to have incurred any liability, and accordingly no claim or recourse in
respect of or in relation to any dealing in securities or any matter connected therewith shall lie
against the Clearing Corporation or any authorised person(s) acting for the Clearing Corporation.
2.
No claim, suit, prosecution or other legal proceeding shall lie against the Clearing
Corporation or any authorised person(s) acting for the Clearing Corporation in respect of
anything which is in good faith done or intended to be done in pursuance of any order or other
binding directive issued to the Clearing Corporation under any law or delegated legislation for the
time being in force.
3.
These Bye-Laws shall be interpreted in a harmonious manner with a view to complying with the
requirements of the Relevant Acts and Rules & Regulations made thereunder, to effectuate the
purposes and businesses of the Clearing Corporation and to ensure that all practices in connection
with the business of the Clearing Corporation as well as the functions of Clearing and Settlement
process of Deals executed on the Concerned Exchanges are conducted in a fair, just, reasonable
manner in order to maintain the integrity of the markets, protect the investors trading on the
Concerned Exchanges, the Members of the Clearing Corporation as well as the Concerned
Exchange on whose behalf the Clearing and Settlement functions are being carried out.
Mumbai,
Date 23.01.2019.
AVNI PATEL,
Company Secretary .
¨É½þÉ®úɹ]Åõ ¶ÉɺÉxÉ ®úÉVÉ{ÉjÉ, ¦ÉÉMÉ nùÉäxÉ-ºÉÆEòÒhÉÇ ºÉÚSÉxÉÉ ´É VÉÉʽþ®úÉiÉÒ,
MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¡äò¥ÉÖ´ÉÉ®úÒ 7-13, 2019/¨ÉÉPÉ 18-24, ¶ÉEäò 1940
53
ON BEHALF OF GOVERNMENT PRINTING, STATIONERY AND PUBLICATION, PRINTED AND PUBLISHED BY DIRECTOR
DR. NAMDEO KONDAJI BHOSALE, PRINTED AT GOVERNMENT CENTRAL PRESS, 21-A, NETAJI SUBHASH ROAD, CHARNI
ROAD, MUMBAI 400 004 AND PUBLISHED AT DIRECTORATE OF GOVERNMENT PRINTING, STATIONERY AND PUBLICATIONS,
21-A, NETAJI SUBHASH ROAD, CHARNI ROAD, MUMBAI 400 004 EDITOR : DIRECTOR DR. NAMDEO KONDAJI BHOSALE.