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M.P. bourse told to frame own by-laws, rules

K.R. Srivats

The capital markets regulator had in a recent order asked the MPSE Governing Board to get the newly formulated rules and by-laws adopted in a general meeting of the exchange and forward them to the regulator within a period of two months, a SEBI official said.

NEW DELHI, Aug. 23

THE Securities and Exchange Board of India (SEBI) has directed the Governing Board of Madhya Pradesh Stock Exchange (MPSE) to formulate its own rules, by-laws and regulations. MPSE has hitherto been adopting the rules, by-laws and the regulations of the Bombay Stock Exchange (BSE).

The capital markets regulator had in a recent order asked the MPSE Governing Board to get the newly formulated rules and by-laws adopted in a general meeting of the exchange and forward them to the regulator within a period of two months, a SEBI official said.

This move of SEBI under the Securities Contracts (Regulation) Act comes in the wake of MPSE's failure to formulate its own rules and by-laws despite directives from the capital markets regulator on the same matter since 1997.

Further, it has directed the exchange to adopt the model by-laws laid down by SEBI in December 2001 for formulating its by-laws.

The SEBI official said that the by-laws of MPSE would also have to contain provisions conforming to SEBI's directive in January 2002, which would ban broker-members of the exchange from holding the posts of president, vice-president and treasurer of the exchange.

SEBI has, until now, amended the Articles of Association of 12 stock exchanges in the country to give effect to its decision that barred broker-members from becoming office-bearers of the exchanges. The Union Government had in March 2001 announced its policy decision of segregating trading membership from the management of the stock exchanges of the country. There are 23 recognised stock exchanges in India.

In the case of MPSE, SEBI had in its order observed that MPSE had failed to formulate by-laws to govern the regulations and control of contracts and rules relating in general to the constitution of the stock exchange and in particular to the constitution and powers of the governing body.

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