Securities And Exchange Board Of India (Custodian Of Securities) (Second Amendment) Regulations, 2006. - S.O No. 1860(E) - SEBI/LAD/DOP/79054/2006 - SEBI

SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 31st October, 2006 S.O No. 1860(E). - In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following Regulations to further amend the Securities and Exchange Board of India (Custodian of Securities) Regulations, 1996, namely :- 1. These Regulations may be called the Securities and Exchange Board of India (Custodian of Securities) (Second Amendment) Regulations, 2006. 2. They shall come into force on the date of their publication in the Official Gazette. 3. In the Securities and Exchange Board of India (Custodian of Securities) Regulations, 1996 - (i) after regulation 9, the following regulations shall be inserted, namely - Period of validity 9A. (1) Every certificate granted under sub-regulation (3) of regulation 8 on and after the commencement of the Securities and Exchange Board of India (Custodian of Securities) (Second Amendment) Regulations, 2006 shall be valid for a period of three years from the date of grant of registration or its renewal. (2) Every certificate granted under sub-regulation (3) of regulation 8 before the commencement of the Securities and Exchange Board of India (Custodian of Securities) (Second Amendment) Regulations, 2006 shall be valid for a period of three years from such commencement or its renewal. Renewal of certificate 9B. (1) A custodian of securities, desirous of having its certificate renewed shall make an application to the Board for renewal of the certificate in Form A, not less than three months before the expiry of its period of validity under regulation 9A. (2) The application for renewal of certificate shall be dealt with, as far as may be, as if it were an application for the grant of a fresh certificate under regulation 3 and shall be accompanied with the application fee as specified in Schedule II. (ii) in regulation 15, the following proviso shall be inserted, namely - Provided that a custodian of securities may engage the services of a person not being a custodian, for the purpose of physical safekeeping of gold belonging to its client being a mutual fund having a gold exchange traded fund scheme, subject to the following conditions (a) the custodian of securities shall remain responsible in all respects to its client for safekeeping of the gold kept with such other person, including any associated risks; (b) all books, documents and other records relating to the gold so kept with the other person shall be maintained in the premises of the custodian or if they are not so maintained, they shall be made available therein, if so required by the Board; (c) the custodian of securities shall continue to fulfill all duties to the clients relating to the gold so kept with the other person, except for its physical safekeeping. (iii) in Second Schedule- a. Part A shall be substituted with the following, namely- PART A AMOUNT TO BE PAID AS FEES (i) Application fee ₹ 1,00,000/- (ii) Registration fee ₹ 15,00,000/- (iii) Annual fee Rs.10,00,000/- or 0.001% of the assets under custody of the custodian of securities, whichever is higher. Explanation I: For the purpose of this part, the expression assets under custody shall mean the value of the assets held by the custodian of securities as disclosed by him under sub-paragraph (4) of paragraph II. Explanation II: It is clarified that no registration fee shall be payable under clause (ii), in case of renewal of the certificate of registration. b. in Part B, paragraph II shall be substituted with the following, namely- II. Payment of annual fee (1) On and from the commencement of the Securities and Exchange Board of India (Custodian of Securities) (Second Amendment) Regulations, 2006 the annual fee shall be payable with reference to each financial year, within one month of completion of the financial year. (2) A custodian of securities who is granted registration on and after the commencement of the Securities and Exchange Board of India (Custodian of Securities) (Second Amendment) Regulations, 2006 shall pay proportionate annual fee in respect of the financial year in which he was granted registration and full annual fee for every subsequent financial year during which the registration subsists. (3) A custodian of securities who is granted registration before the commencement of the Securities and Exchange Board of India (Custodian of Securities) (Second Amendment) Regulations, 2006 shall pay proportionate annual fee in respect of the financial year of such commencement and full annual fee for every subsequent financial year during which the registration subsists: Provided that any annual fee paid by a custodian of securities before the commencement of the Securities and Exchange Board of India (Custodian of Securities) (Second Amendment) Regulations, 2006, in respect of a period, the whole or part of which falls after such commencement, shall be proportionately adjusted against the amount payable under this sub-paragraph. (4) The payment of annual fee shall be accompanied by a statement of assets under custody which shall be in such format as may be specified by the Board and shall be certified to be true and complete by the functional head of custody services of the custodian of securities. [F.No. SEBI/LAD/DOP/79054/2006] M. DAMODARAN, Chairman Footnotes: (1) The Securities and Exchange Board of India (Custodian of Securities) Regulations, 1996, the Principal Regulations were published in the Gazette of India on May 16, 1996 vide S.O. No. 344(E). (2) The Securities and Exchange Board of India (Custodian of Securities) Regulations, 1996 were subsequently amended- (a) on December 4, 1996 by the Securities and Exchange Board of India (Custodian of Securities) (Amendment) Regulations, 1996 vide S.O. No.851(E). (b) on October 17, 1997 by the Securities and Exchange Board of India (Custodian of Securities) (Amendment) Regulations, 1997 vide S.O. No.732 (E). (c) on January 5, 1998 by the Securities and Exchange Board of India (Custodian of Securities) (Amendment) Regulations, 1998 vide S.O. No.17 (E). (d) on March 28, 2000 by the Securities and Exchange Board of India (Appeal to the Securities Appellate Tribunal) (Amendment) Regulations, 2000 vide S.O. No.278(E). (e) on May 29, 2001 by the Securities and Exchange Board of India (Investment Advice by Intermediaries) (Amendment) Regulations, 2001 vide S.O. No.476(E). (f) on September 27, 2002 by the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 vide S.O. No.1045(E). (g) on March 10, 2004 by the Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004 vide S.O. No. 398(E). (h) on January 12, 2006 by the Securities and Exchange Board of India (Custodian of Securities) (Amendment) Regulations, 2006 vide S.O. No.39 (E). *************