sebi:WTM/PS/17/MRD/DSA/JULY/2013
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Facts / Headnote
Warning issued to the Governing Board of the Pune Stock Exchange Limited
Provisions invoked
- s. 19
- s. 12A
Regulations
- Reg. 8
- Reg. 11(1)
- Reg. 11(2)
- Reg. 52
- Reg. 11(3)
Parties
- Pune Stock Exchange Limited
Holding
PSE was found negligent in the discharge of its functions and duties for various regulatory lapses, and a penalty of warning was imposed on the Governing Board of the Pune Stock Exchange Limited.
Full text
Page 2 of 8 Shareholding in recognised Stock Exchanges) Regulations, 2006 (hereinafter referred to as 'MIMPS Regulations') and Regulation 52 of the Securities Contracts (Regulations) (Stock Exchanges and Clearing Corporations) Regulations, 2012. The SCN inter alia alleged that PSE has failed to submit periodical reports, failed to appoint the Chief Executive/ Managing Director, failed to conduct half yearly inspection of subsidiary and the sub-brokers, intervened in the functioning of PSL, committed irregularities in the composition of Investor Protection Fund (hereinafter referred to as 'IPF'), etc., in violation of the provisions of Regulation 11(1), (2) and (3) of the MIMPS Regulations, the SEBI Circular bearing no. MRD/DSA/Cir-06/2005 dated February 17, 2005, SEBI Circular bearing no. SMD/SED/6919/93 dated April 20, 1993, SEBI Circular bearing no. SMD/POLICY/Cir-4/2003 dated February 11, 2003, SEBI Circular bearing no. SMD/POLICY/Cir-4/2003 dated February 11, 2003, SEBI Circular bearing no. MRD/DOP/SE/Cir-38/2004 dated October 28, 2004, SEBI Circular bearing no. SMD/POLICY/Cir-32/97 dated December 03, 1997, SEBI Circular bearing no. SE/10118 dated October 12, 1992, SEBI Circular bearing no. MRD/DOP/SE/Cir-07/2005 dated February 23, 2005. PSE was advised to reply to the SCN, within a period of fifteen days from the date of receipt thereof. It was also informed that in case of failure to reply, it would be presumed that PSE had no explanation to offer and that SEBI shall pr
Page 3 of 8 Fund and the same was taken on record. The submissions of PSE, made during the oral hearing as well as in its written replies dated December 31, 2012 are summarized in brief below: a. PSE has admitted that there have been certain irregularities in its functioning. It said that it has rectified most of the irregularities as mentioned in the SCN and is in the process of complying with the remaining ones. b. PSE had made various efforts in order to appoint the Executive Director and Managing Director for the purpose of day to day administration of the Exchange. c. PSE stated that Mr. Amit Modak, a Trading Member Director of PSE and Mr. Rajendra Nahar, a Shareholder Director of PSE were appointed only to oversee the functioning of PSL without any intention to interfere in its working. d. The IPF Trust of PSE, consist of one office bearer, one Public Representative Director and one representative of the Investor Association. The representatives have been appointed by PSE after passing the Trust Board Resolution dated November 30, 2012. Further, it was also submitted that all the accounts of IPF were disclosed during the inspection. e. PSE has submitted that it will transfer the amount of 97,46,766 from the General Reserves Fixed Deposit to the Investor Service Fund fixed deposit along with the interest earned on the said amount on approval by the Board Resolution and the Auditors of the PSE. f. PSE has submitted that notices have been issued to 41 members who have not
Page 4 of 8 "11(1) .... (2) Without prejudice to the provisions of the Act and the rules made thereunder, the recognised stock exchanges shall submit a report to the Board disclosing the following on a quarterly basis within fifteen days from the end of each quarter:- (a) the names of ten largest shareholders along with the number of shares held by them and their percentage shareholding; (b) the names of the shareholders falling under regulation 8 who had acquired shares in that quarter; (c) the shareholding pattern in the recognised stock exchange in such format as may be specified by the Board. (3) The recognised stock exchange shall submit an undertaking confirming the compliance of the provisions of sub-regulation (1) to the Board on a quarterly basis within fifteen days from the end of each quarter. (4) ...."
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Source: SecMarx — sebi:WTM/PS/17/MRD/DSA/JULY/2013. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.