NSE violating SCRA, alleges ANMI
Press Trust of India
New Delhi, Jan 20: With the renewal of recognition to the National Stock Exchange (NSE) coming up in May this year, Association of NSE Members of India (ANMI) has alleged that the exchange is violating some provisions of the Securities Contract Regulation Act, 1956 (SCRA) by denying its members voting rights.``The exchange has been violating SCRA and the renewal of the recognition should not be allowed by the government till the exchange complies with the Act,'' said alternate president, ANMI, V D Aggarwal. The government had given recognition to NSE for five years which terminates in May 1998 and the exchange will have to approach the government for renewal of its recognition. Aggarwal said without prior permission of the government NSE is violating Section 7(a) of SCRA, which provides for voting rights to the members of the exchange. Sources in the Finance ministry said that no permission has been granted to NSE under Section 7(a) and the exchange was recognised under the existing guidelines of
SCRA. NSE uses the term `trading members' while giving permission to persons or corporates to trade on the exchange and defines them as members of the exchange. However, the Articles of Association of National Stock Exchange of India Limited says that the trading members of the exchange shall not have any right as the member of the company, under which the exchange functions.``The provisions set by NSE for its members has hit the foundation of SCRA, and completely violates the Act'' Aggarwal said. He further said that the bye-laws of NSE are completely different from 21 other recognised exchanges in the country. ``Bye-laws of other exchanges say that every member of the exchange must be member of the company but it is not necessary that every member of the company must be a stock broker'', he said. Aggarwal says, when 21 exchanges of the country make similar provision about the membership of the exchange how could NSE alone be permitted or can deviate from the definition of members under the very Act
which regulates it.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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