TMI BlogInspection of stock brokers by stock exchangesX X X X Extracts X X X X X X X X Extracts X X X X ..... and to promote the development of, and to regulate the securities market. Till now the stock exchanges were directed to inspect books and accounts and other documents of at least 10% of the active brokers of the stock exchange in a year and institute necessary disciplinary action against brokers whose books of accounts and other documents reveal malpractice. It has now been decided that the exchanges would carry out inspection of at least 20% of the active brokers every year beginning from the financial year 2003-2004. These inspections shall invariably include the subsidiaries of other stock exchanges registered as brokers of your exchange. Exchanges are also directed to work out a transparent criteria for selection of brokers for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Criteria of selection of broker for inspection Violations observed during inspection Action taken against the broker. Follow up of Inspection The above table (Part B ) will contain more comprehensive details about inspection and post inspection action in respect of brokers as per the information given in Part A . An illustrative list of possible violations is enclosed for your reference. Exchanges shall be required to cover these areas in detail during their inspection of stock brokers. Exchanges are advised to note that their inspections shall not be limited necessarily to areas listed in the list but also cover any additional a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brokerage charged by the brokers exceed the limits prescribed. 4. Charging the clients rates more than the prevailing market rates 5. Non payment/not giving the deliveries to clients within prescribed time limit 6. Not taking adequate steps for redressal of grievances of investors within one month from date of receipt of the complaint 7. Non maintenance of client database (Client agreements and Registration forms) 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered into by brokers. 16. Non submission of audit report within the prescribed time limit. 17. Instances of broker dealing with unregistered sub-brokers. 18. Instances of broker of a stock exchange acting through brokers of other exchanges for its clients without registering as a sub broker of these brokers. 19. Broker involved in business other than the securities business. 20. Non payment/ inadequate payment of SEBI registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
