Availability of ‑ Company not to be registered with words “Stock Exchange” as part of its name without obtaining in principle approval/no objection of SEBI - Companies Law - Circular : No. 3/96

Circular : No. 3/96 [F. No. 3/4/96-CL. V], dated 12-4-1996, Department of Company Affairs, Ministry of Law, Justice and Company Affairs. Subject:- Name of company - Availability of ‑ Company not to be registered with words Stock Exchange as part of its name without obtaining in principle approval/no objection of SEBI I am directed to draw your attention to this Department s Circular No. 27/22/85-CL.III, dated 13-1-1986 and 18-9-1991 and Circular No. 27/50/92-CL. III, dated 23-3-1993 on the above subject and to enclose a copy of letter, dated 18-3-1996 received from the Chairman, SEBI in this regard. You are requested to ensure that under no circumstances a company is registered with the words Stock Exchange as part of its name without obtaining in principle approval/no objection of Securities and Exchange Board of India. It may kindly be noted that non-compliance with these instructions will be viewed very seriously. Annex Letter No. SMD/RCE/PJ/1045/96, dated 18th March, 1996 from Chairman SEBI to Additional Secretary, Department of Company Affairs It has come to our notice that certain companies calling themselves stock exchanges are enrolling members and collecting substantial deposits from them. The companies who have not obtained permission to operate as a stock exchange under section 19 of Securities Contracts (Regulation) Act, 1956 or have not been granted recognition by Central Government/SEBI under section 4 of the above Act, are collecting such deposits in violation of the provisions of the said Act. Section 19(1) of Securities Contracts (Regulation) Act, 1956 prohibits organising or assisting in organising any stock exchange without the permission of the Central Government/SEBI. In this regard, we request you not to allow such names to new companies which have the words Stock Exchange in them unless they have been given in-principle approval or no objection from SEBI. This would ensure that the investors are not misled by such names into dealing with members of unrecognised stock exchanges.