Application Forms for Recognition and Renewal of Market Infrastructure Institutions

[Image omitted. See the official document.]

CIRCULAR

F. No. 286/IFSCA/CMD-DMIIT/PM-MII/2021/1

September 20, 2021

To,

All Stock Exchanges in the International Financial Services Centre (IFSC)
All Clearing Corporations in the International Financial Services Centre (IFSC)
All Depositories in the International Financial Services Centre (IFSC)

Dear Sir/Madam,

Sub: Application Forms for Recognition and Renewal of Market Infrastructure Institutions (MIIs)

1. The Authority notified the IFSCA (Market Infrastructure Institutions) Regulations, 2021 on April 12, 2021. It has now been decided to issue application forms for recognition and renewal of MIIs in GIFT-IFSC.

2. New entities desirous of operating as MIIs and existing MIIs operating in GIFT-IFSC are hereby advised to submit the applications forms for recognition / renewal of recognition as per the formats provided in the Annexure.

3. This circular is issued in exercise of powers conferred by section 12 of the International Financial Services Centres Authority Act, 2019 to develop and regulate the financial products, financial services and financial institutions in the International Financial Services Centres.

4. A copy of this circular is available on the website of the International Financial Services Centres Authority at www.ifsca.gov.in

Yours faithfully,

Praveen Kamat
Deputy General Manager
Division of Market Infrastructure Institutions & Technology
Capital Markets Department
email: praveen.kamat@ifsca.gov.in
Tel: +91-079-61809820

---

[Image omitted. See the official document.]

Annexure

FORM A

(See Regulation 5 and 12)

Application for recognition under regulation 5/renewal of recognition of a stock exchange under regulation 12 of the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021

To

......................................
......................................

Subject: Application for recognition of a stock exchange under regulation 5/ Application for renewal of recognition of a stock exchange under regulation 12 of the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021.

Dear Sir,

1. Pursuant to the Notification No. ..........................dated ………../Certificate of recognition dated...............................We/I on behalf of .................. (name and address of stock exchange) being a stock exchange as defined in section 2 of the Securities Contracts (Regulation) Act, 1956 hereby apply for recognition/renewal of recognition for the purposes of the said Act in respect of contracts in securities.

2. Enclosed with this application are:

• (a) four copies of the rules, memorandum and articles of association relating in general to the constitution and management of the stock exchange and
• (b) four copies of the bye-laws for the regulation and control contracts in securities

3. All the necessary information required in the Annexure to this Form is enclosed. Any additional information will be furnished as and when called for by the International Financial Services Centres Authority (IFSCA).

4. We/I on behalf of the said stock exchange hereby undertake to comply with the requirements of regulation 8 of the Regulations and such other conditions and terms as may be contained in the certificate of recognition or be prescribed or imposed subsequently.

5. Remittance receipt No. ............. dated..................... for USD ..................is attached..

Yours faithfully,

Signature of applicant

---

[Image omitted. See the official document.]

ANNEXURE TO FORM 'A'

Part I - General

1. Name of the applicant stock exchange.
2. Address.
3. Date of establishment.
4. Is your exchange a joint stock company (state whether public or private) registered under the Indian Companies Act or an association for profit or otherwise? If it is organized on some other basis, please provide details thereof.
5. Please provide details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the Exchange for the preceding three years.

Part II - Membership

6. State the number of members at the time of application. Please specify the number of inactive members.
7. State whether there is any provision, resolution or convention for limiting the number of members and whether in pursuance thereof you have fixed a ceiling onthe number of members that you would take.
8. Do you insist on any minimum qualifications and experience before enrolling new members? If yes, please provide details.
9. State the different classes of members, if any, the number thereof and the privileges enjoyed by each class. What is the procedure followed by your exchange for the admission of different classes of new members?
10. What are the rates of your annual subscription in respect of the different classes of members?
11. Do you collect any security deposit from your members? If yes, please provide details and state the manner in which such deposits are utilized and the rate of interest allowed, if any.
12. Do you collect any admission or entrance fees from your members or from partners of firms who are members? If yes, how much?
13. Do you insist on your members and partners of firms who are members divesting themselves of other activities either as principal or as employee?
14. Do your rules permit firms to become members? If yes, is it incumbent on members to seek the approval of the governing body before admitting new partners? State the conditions, if any, laid down in your rules for the admission of such partners.
15. In the event your rules do not permit firms from being enrolled as members, do you permit individual members to form a partnership? State the procedure followed for the recognition of such partnership.
16. Do you permit members to work in partnership with non-members? If yes, how far such non-members subject to the control of the stock exchange?

Part III - Governing Body

17. What is the present strength of your governing body? Please provide details of the constitution, powers of management, election and tenure of office of members of thegoverning body, and the manner in which its business is transacted.
18. Are any trade or commercial interest represented on your governing body? If yes, please provide details of interests represented.
19. Do you associate shareholders of investors associations with the management ofyour exchange? If yes, please state the manner in which it is done.
20. Are there any Government representatives on your governing body? If yes, furnish their names.
21. Do your rules provide for the direct election by members of any other bodies or committees, apart from the governing body? If yes, please provide details of their constitution, tenure, powers and functions.
22. Do you have any provision for the appointment of standing or ad hoc sub- committees of the governing body? If yes, furnish details of the method of their appointment, terms of office, powers and functions.
23. Give the designations, powers and duties of principal office-bearers of your exchange. Are any of these office-bearers in the pay of the stock exchange? If yes, please provide details as to the mode of their appointment, tenure of office and remuneration.

Part IV - Trading

24. Do you have a trading ring? If not, how do you carry on the business? Please provide details.
25. State the different kinds of contracts in use on your exchange e.g., spot, ready andforward. State the period of delivery and payment in each case.
26. Please provide details of business hours for each type of contract.
27. Please provide details of the scale of brokerage and other charges, if any, prescribed by your exchange.
28. Do you prescribe standard forms of contract for the use of your members? Attach three copies of each such contract form.
29. Do you classify your members into brokers and jobbers? If yes, specify the bye-law under which this is done.
30. Do you have a system of registration of remisiers and/or authorized clerks? If yes, please provide details as to their qualifications, obligations and rights, etc.
31. Do you have any regulations regarding dealings by members on their own account whether in the nature of Taravani (day-to-day) or otherwise?
32. Do you have any provisions for regulating the volume of business done by any individual member other than through a system of margins? If yes, please provide details.
33. What provisions have you made for periodical settlement of contracts and differences thereunder, the delivery of, and payment for securities and the passing ofdelivery orders?
34. Do you have a clearing house for the settlement of contracts? If yes, please provide details ofits organization and management.
35. If you have clearing house, what returns do the members of your exchange submit regarding the transactions cleared through such clearing house? Does the exchange ask for any regular returns in respect of transactions settled outside the clearing house? Submit three copies of forms used in this connection.
36. How do you fix, alter or postpone the dates of settlement?
37. How do you determine and declare making-up prices?
38. Do you have any arrangements for making or recording of bargains?
39. Have you any arrangements for recording and publishing market rates including opening, closing, highest and lowest rates?
40. What provisions have you made for regulating—(a) the entering into contracts, theirperformance and rescission, including contracts: (i) between members, (ii) between a member and his constituent, and (iii) between a member and a non-member; (b)the consequences of breach, default or insolvency on the part of members whether acting as buyers, sellers or intermediaries; and (c) ‘havalas’ and other matters relating to conduct of business of members in the exchange?
41. Do you prescribe margin requirements? If yes, please provide details.
42. Do you prescribe maximum and minimum prices for securities? If yes, how and under what conditions.
43. Do you provide any safeguards for the prevention of ‘bullsqueezes’ and; ‘bear- raids’ and for meeting emergencies in trade? Please provide details.
44. What are the measures adopted by you to regulate or prohibit advertising or issue of circulars by your members?
45. What are the disciplinary powers with the governing body to enforce due compliance by members of the rules and bye-laws of the exchange and generally to ensure proper standard of business conduct?
46. Do you require members to supply such information or explanation and to produce such books relating to their business as your governing body may require?
47. Do you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if maintained? In particular, have you evolved any machinery for computing the volume of transactions in thedifferent kinds of contracts permitted on your exchange? Please provide details.
48. Do you have any bye-laws contravention of which makes a contract void?