ARTICLES OF ASSOCIATION
ARTICLES OF ASSOCIATION OF U. P. STOCK EXCHANGE LIMITED
GENERAL
1. In these presents and in the Bye-Laws and regulations framed or adopted hereunder unless there is anything repugnant in the subject or context :(i) 'The Exchange’ or 'The Association’ or ‘UPSE’ means 'U.P. Stock Exchange Limited. ’
(ii) ‘Trading Member’ means a Stock Broker of UPSE and registered with SEBI as such, under the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992.
(iii) 'These presents’ mean and include the Memorandum of Association, the Articles of Association and all supplementary, substituted or amended Articles and Bye-laws and Regulations of the Exchange in force from time to time.
(iv) 'The Act’ means the Companies Act, 1956 or such other enactment as may be in force as law governing the Companies in India for the time being.
(v) 'In Writing’ and 'Written’ include printing, lithography, cyclostyle and other modes of representing or reproducing words in visible form.
(vi) 'Month’ and 'year’ mean the English Calendar month and English Calendar Year.
(vii) 'Bye-laws and Regulations’ mean the Bye-laws and Regulations of the Exchange framed or adopted under these presents and amended, altered or modified from time to time and those Bye-laws and Regulations and Statutory Rules framed by Securities and Exchange Board of India for the Stock Exchange in general or for the Exchange in particular.
(viii) 'Board’ or ‘Governing Board’ means the Board of Directors of the Exchange.
(ix) 'Notice Board’ means the Notice Board kept by the Exchange for pasting notices etc.
(x) 'Securities’ include shares, scrips, stocks, bonds, debentures, stocks, and debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate or rights or interests in such securities and also include Government securities and such other things as may be so referred to by any law in force.
(xi) 'Government Security’ means a Government Security as defined in the Public Debt Act, 1944 or any other law relating thereto.
(xii) Heading or marginal notes do not constitute a part of the text and do not affect its construction.
(xiii) 'The Office’ means the Registered Office for the time being of the Exchange.
(xiv) 'Rules’ include Memorandum of Association and Articles of Association of the Exchange.
(xv) 'The Register’ means the register of shareholders to be kept pursuant to Section 150 of the Companies Act, 1956.
(xvi) 'Automated Trading System (ATS) of the Exchange’ means the computerised system for trading in securities developed by the Exchange, access to which is made available to trading members.
(xvii) 'Broker’ shall mean a trading member of the Exchange acting as a broker for his constituent.
(xviii) 'Business’ shall mean the business of sale and purchase of Shares, Stocks, Debentures, Government Bonds or Securities, or other business which a Stock and Share Broker may normally be expected to do.
(xix) The Arbitration Committee and any other Committee referred to in these presents Bye-laws and Regulations framed thereunder, shall be a committee so appointed or selected by the Board for the purpose.
(xx) Words importing persons include corporations, firms, joint families or joint stock companies.
(xxi) Words importing the masculine gender shall include the feminine gender and vice versa.
(xxii) Words importing the singular shall include the plural and vice versa.
(xxiii) Unless otherwise defined in these presents or unless the context requires a different meaning, any word or expression occurring in these presents shall bear the same meaning as in the Securities Contracts (Regulation) Act, 1956 or any Statutory Rules framed thereunder.
(xxiv) (a) 'Demutualisation Scheme’ means U.P. Stock Exchange Limited (Demutualisation) Scheme, 2005, as approved by SEBI.
The provisions of the ‘Demutualisation Scheme’ shall apply to the Exchange with effect from the date of Notification of the said ‘Scheme’, in the Official Gazette, by Securities and Exchange Board of India (SEBI) under its Order No.SEBI/MRD/48113/2005 dated August 29, 2005.
Notwithstanding anything contrary contained in these Articles, the provisions of the ‘Demutualisation Scheme’ will have overriding effect and shall prevail over the existing Articles so far as they are inconsistent with the provisions of the ‘Demutualisation Scheme’.
(b) 'Due Date’ means the date of 28th November, 2005, as determined by the Administrator (i.e. Board) of the Exchange, in the context of ‘Demutualisation Scheme’.
(c) 'Appointed Date’ means the date to be notified by SEBI, on and from which, the UPSE shall stand Demutualised.
(d) 'Member’ means a person who is a member of UPSE on the day preceding the Due Date as per the Register of Members maintained by it.
(e) 'Shareholder’ means a person who holds any equity share(s) of UPSE on or after the Due Date.
2. The Provisions contained in Table 'A’ of Schedule 1 of the Companies Act, 1956 shall apply to the Exchange only in so far as they are statutorily mandatory or not inconsistent with the provisions of these Articles and are not excluded or modified by these presents.
CAPITAL
3. (a) The Authorised Share Capital of the Exchange is Rs.20,00,000/- (Rupees Twenty Lacs only) divided into 1,000 (One Thousand) Equity Shares of Rs.2,000/- (Rupees Two Thousand only) each.(b) The Exchange shall have power to increase or reduce the Capital of the Exchange and to consolidate or sub-divide it or to divide the shares in the capital of the Exchange into such several classes and to attach thereto such special rights, privileges or conditions as may be determined by the Exchange under its Articles of Association.
ALTERATION OF CAPITAL
4. The Board may, with the sanction of the Exchange in General Meeting, increase the share capital by such sum, to be divided into shares of such amount as the resolution shall prescribe and offer and allot these new shares on such terms and conditions as it may from time to time prescribe.5. The new shares shall be subject to the same provisions with reference to the allotment, payment of calls, lien transfer, transmission and forfeiture as the shares in the original share capital.
6. The Exchange may, by Ordinary Resolution :
(i) consolidate and divide its share capital into shares of larger amount than its existing shares, and
(ii) By sub-division of its existing shares or any of them, divide the whole or any part of its share capital into shares of smaller amount than is fixed by the Memorandum and Articles of Association subject, nevertheless, to the compliance of the provisions of the Companies Act, 1956 or any other law for the time being in force.
7. The Exchange may, by Special Resolution, reduce the share capital in such manner as may be permitted by law.
8. Unsubscribed or unallotted shares shall be under the control of the Board of Directors, who shall allot or otherwise dispose of the same, in such manner, as it deems fit.
SHARE CERTIFICATES
9. Every shareholder shall be entitled to a certificate in respect of his share in the Capital of the Exchange which shall be issued under the signatures of any two Directors of the Exchange and countersigned by the Company Secretary or some other person(s) appointed by the Board.
10. In the case of a certificate being worn out, or defaced, a new certificate may be issued in lieu of the old one which must be surrendered to the Exchange. In case of loss, damage or destruction of a certificate, a new certificate may be issued on production of evidence to the satisfaction of the Directors or such indemnity being given as the Board of Directors may require. For the issue of new certificate as aforesaid, the Exchange may demand Rs.2/- or such sum, as the Board may decide.
TRANSFER AND TRANSMISSION OF SHARES
11. The instrument of transfer of any share in the Exchange shall be executed both by the transferor and the transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of the shareholders in respect thereof. Each signature to such transfer shall be duly attested by the signatures of one responsible person who shall add his address.12. Share of the Exchange shall be transferred in the form prescribed under the Companies Act, 1956 or in such other form as may be prescribed from time to time under the law applicable to the Exchange.
13. The Board of Directors may decline to register the transfer or transmission of shares to any person, if such transfer is in violation of any order/rules/regulations of SEBI or any other regulatory authority or, if in their opinion, such transfer or transmission, shall not be conducive to the interests and objects of the Stock Exchange.
14. The Directors may suspend the registration of transfer of shares during fourteen days immediately preceding the Ordinary General Meeting of the Exchange in each year.
15. Every instrument of transfer shall be accompanied with the certificate of shares to which it relates, and such other evidence as the Directors may reasonably require to establish the right or authority of the transferor, to make the transfer.
16. Before recognizing any legal representatives, the Board of Directors may require him to produce such evidence as may be necessary from the court of competent jurisdiction in the matter and the Board of Directors, shall have absolute discretion as to the evidence they may require to be produced.
17. Shares forfeited shall be deemed to be the property of the Exchange, and the Board of Directors shall sell, re-allot or otherwise dispose of the same, to any one.
TRADING MEMBERSHIP OF THE STOCK EXCHANGE
18. A Member, who is registered as a Stock Broker on the day preceding the Due Date shall become a Trading Member on the Due Date. All trading members of the Exchange under the these presents shall be bound to comply with all such requirements as may be necessary under these presents, or under the Securities Contracts (Regulation) Act, 1956 and the Rules framed thereunder, Notifications or Orders issued by the Securities and Exchange Board of India from time to time in that behalf or as may be, laid down by the Board under these presents for the continuance of trading membership, subject to the following conditions :(i) Trading membership of the Stock Exchange shall be open only to individuals and companies who are eligible to become and continue to be trading members of a recognized Stock Exchange under the Securities Contracts (Regulation) Rules, 1957.
(ii) A trading member shall pay annual membership fees, as may be fixed by the Board of Directors, from time to time.
18(A) (i) Multiple Trading Membership:
Multiple trading membership of another recognized Stock Exchange(s) shall be open to an eligible trading member (whether corporate or individual) , who has been admitted to Stock Exchange trading membership in accordance with Rule 8 of Securities Contracts (Regulation) Rules, 1957.
Provided that in case a Corporate Trading Member is a trading member of another Stock Exchange (s) , atleast one of its Whole-time Directors should normally be resident of Kanpur or Lucknow or any other city where UPSE Additional Trading Floor (ATF) is operative.
(ii) Default of Multiple Trading Members:
In case a trading member, holding multiple trading membership of other recognized Stock Exchange(s) has been declared defaulter at any one of the recognized Stock Exchange(s) , such a trading member, shall automatically be declared a defaulter, in this Exchange. The apportionment of the assets, of the said defaulter trading member against the claims of the concerned Stock Exchanges, shall be done strictly Stock Exchange-wise. If there is a surplus of assets of the defaulter trading member after the apportionment at one Stock Exchange, the said surplus may be adjusted against the claim of this Stock Exchange or other Stock Exchange(s) .
19. (1) No person shall be eligible to be elected as a trading member if :
(a) He is less than twenty-one years of age.
(b) He does not possess a minimum educational qualification of Intermediate or equivalent examination:
Provided that the Board of Directors may waive compliance with foregoing conditions with the prior approval of the Securities and Exchange Board of India, when an Individual succeeds to the established business of a deceased or a retiring trading member or in any other deserving case.
(c) He is not a citizen of India, provided that the Board of Directors may in suitable cases relax this condition with the prior approval of the Securities and Exchange Board of India.
(d) He has been adjudged bankrupt or a receiving order in bankruptcy has been made against him or he has been proved to be insolvent even though he has obtained his final discharge.
(e) He has compounded with his creditors, unless he has paid one hundred paise in the rupee.
(f) He has been convicted of an offence involving fraud or dishonesty.
(g) He is engaged as principal or employee in any business other than that of securities or commodity derivatives except as a broker or agent not involving any personal financial liability, unless he undertakes on admission to sever his connection with such business :
Provided that no member may conduct business in commodity derivatives, except by setting up a separate entity which shall comply with the regulatory requirements, such as net worth , capital adequacy margins and exposure norms as may be specified by the forward market commission from time to time.
(h) He has been at any time expelled or declared a defaulter by any other Stock Exchange.
(i) He has been previously refused admission to trading membership, unless a period of one year has elapsed since the date of such rejection.
(j) IIn case of a Corporate Trading Member, it shall furnish its Memorandum & Articles of Association and / or constitution and / or Rules and Regulations and Bye-laws, if any, alongwith Board Resolution(s) electing to be a Corporate Trading Member and appointing named Director(s) / authorized representative(s) to act, engage and deal on behalf of such Corporate Trading Member on the Stock Exchange as also furnish the specimen signature of such Director(s) authorized representative(s) . But provided further that such a Body Corporate has not committed an act of insolvency or an act for which such Body Corporate is liable to be wound up under the provisions of law, nor has a provisional liquidator or Receiver or Official Liquidator or Receiver been appointed of such body Corporate Trading Member to trade on the Stock Exchange either directly or indirectly or through the named authorized representative (s) / Director(s) . Provided further that the eligibility conditions to individual trading members or firms would apply to the Director(s) / authorized representative(s) of the Body Corporate as is nominated / appointed to act, engage and deal on the Stock Exchange on behalf of the Corporate Trading Member.
(2) No person eligible for admission as a Trading Member under Sub-rule (1) shall be admitted as a trading member unless :
(a) He has worked for not less that two years as a partner with, or as an authorized assistant or authorized clerk or remisier or apprentice to a trading member, or
(b) He agrees to work for a minimum period of two years as a partner or representative trading member with another trading member and to enter into bargains on the floor of the Exchange not in his own name but in the name of such other trading member, or
(c) He succeeds to the established business of a deceased or retiring trading member who is his father, uncle, brother or any other person who is, in the opinion of the Board of Directors, a close relative:
Provided that the Board of Directors, however, may waive compliance with any of the foregoing conditions if the person seeking admission is in respect of means, position, integrity, knowledge and experience of business in securities, considered by it to be otherwise qualified for trading membership.
(3) No person who is a trading member at the time of adoption of the Articles or subsequently admitted as a trading member shall continue as such if :
(a) He ceases to be a citizen of India :
Provided that nothing herein shall affect those who are not citizens of India but are admitted under the provisions of clause (c) of sub-rule (1) of this rule, subject to their complying with all other requirements of this rule.
(b) He is adjudged bankrupt or a receiving order in bankruptcy is made against him or he is proved to be insolvent.
(c) He is convicted of an offence involving fraud or dishonesty.
(d) He engages either as principal or employee in any business other than that of securities or commodity derivatives except as a broker or agent not involving any personal financial liability, provided that-
i. the board of directors may, for reasons, to be recorded in writing, permit a member to engage himself as principal or employee in any such business, if the member in question ceases to carry on business on the stock exchange either as an individual or as a partner in a firm.
ii. in the case of those members who were under the rules in force at the time of such application permitted to engage in any such business and were actually so engaged on the date of such application, a period of 3 years from the date of the grant of recognition, shall be allowed for severing their connection with any such business.
(e) He ceases to be an active trading member.
(4) ACompany as defined in the Companies Act, 1956 (1 of 1956) shall be eligible to be elected as a trading member of the Exchange if such Company fulfills the conditions laid down in sub-rule (4) of rule 8 of the Securities Contracts (Regulation) Rules, 1957 :
Provided that where the Securities and Exchange Board of India makes a recommendation in this regard, the Board of Directors of the Exchange shall, in relaxation of the requirements of any conditions as aforesaid, admit as trading members, the corporations, companies and institutions mentioned in the Proviso to the Sub-rule (4) of rule 8 of the Securities Contracts (Regulation) Rules, 1957.
(5) Acompany as defined in the Companies Act, 1956 (1 of the1956) shall also be eligible to be elected as a Trading Member of the Exchange if such Company fulfills the conditions laid down in sub-rule (4A) of rule 8 of the Securities Contracts (Regulation) Rules, 1957.
(6) (i) A company as defined in the Companies Act, 1956 shall be eligible to apply for trading membership of the Exchange if –
(a) such company is formed in compliance with the provisions of Section 12 of the Companies Act, 1956;
(b) such company undertakes to comply with such financial requirements and norms as may be specified by the Securities and Exchange Board of India for the registration of such company under sub-section (1) of Section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) ;
(ba) The directors of the company are not disqualified from being trading member of the stock exchange under Securities Contracts (Regulation) Rules, 1957, and the directors of the company had not held the offices of the directors in any company which had been a member of the stock exchange and had been declared defaulter or expelled by the stock exchange and;
(c) Not less than two directors of the company are persons who possess a minimum two years’ experience :
a) in dealing in securities ; or
b) as portfolio managers ; or
c) as investment consultants.
(ii) Minimum paid up capital
The company must have a minimum paid up capital of Rs.20 lakhs or such amount as may from time to time be prescribed.
Provided that a Corporate Trading Membership converted from individual trading membership as per the prescribed norms of the Exchange from time to time, shall have minimum paid up capital of Rs.10 lakhs only or such amount, as may from time to time be prescribed by the Governing Board.
(iii) Maintenance of Networth :
The Corporate entities must at all times maintain a networth as required under the capital adequacy norms issued by the Securities and Exchange Board of India from time to time.
(iv)Restriction on employment of certain persons as directors :
A corporate trading member shall not employ or appoint any person as a director whose registration as an intermediary has been cancelled by the SEBI in accordance with the Rules, Regulations applicable to such intermediary.
(v) Multiple Trading Membership :
If the corporate trading member acquires the trading membership of more than one Stock Exchange, it shall comply with such financial requirements and norms as may be specified by SEBI for the registration of such a company under sub section (1) of Section 12 of the SEBI Act, 1992, (15 of 1992) and the capital adequacy networth and other financial norms of each of such stock exchanges, separately.
For this purpose separate and segregated accounts in respect of each of the Stock Exchanges, of which he is a trading member, shall be maintained.
(vi) Acceptance of Deposits :
The corporate trading members may accept deposit (not being the amount collected by way of margin and dues collected from the clients) as per the limits provided by the RBI under the Non-Banking Financial Companies (Reserve Bank) directions, 1977.
(vii) The Corporate trading member undertake to fulfill the following :
a) The Articles of Association of the Corporate Trading Member shall be amended as per the directives / guidelines issued by the Exchange from time to time, and as required by the Governing Board of the Exchange.
b) The list of shareholders of the Corporate trading member shall be furnished to the Exchange every year alongwith the Annual Audit Report and at any other time as required by the Exchange.
c) The Corporate trading member shall not, without the approval of the Governing Board register the transfer of any shares in any manner as a result of which the transferee gets the right to exercise 5% or more voting rights in the corporate trading member.
d) Without prejudice to the provisions of the Companies Act, 1956 (1 of 1956) , the name of the Corporate entity, its Memorandum and Articles of Association, shall not be altered without the previous approval of the Governing Board.
e) Without prejudice to the provisions of the Companies Act, 1956 (1 of 1956) , no person shall be appointed or re-appointed, either as a Director, Managing Director or as a Whole time Director of the Corporate trading member except with the prior approval of the Governing Board.
f) The Corporate trading member shall undertake to fulfill unconditionally, all the conditions or requirements which the Exchange may prescribe for admission as a Trading Member of the Exchange from time to time.
(viii) In case there is any change in the shareholding of the corporate trading member in any manner, as a consequence of which the control in the corporate trading member is altered, modified or changed or if a person appointed as director of the corporate trading member, and such alteration, modification, change or appointment is not acceptable to the Governing Board, then the Governing Board may expel the trading member from the Exchange.
(ix) The Corporate Trading Member shall nominate two of its directors (including Managing Director / Whole-time Director, if any) to represent it in its dealings with the Exchange.
20. The following procedure shall be observed with regard to the enrollment, admission, or election of new trading members of the Exchange :
(a) Any person, not being a minor or of unsound mind and a Company as defined under Sub-Article 19(4) & 19(5) eligible and qualified can apply to become a trading member of the Exchange by making an application in writing to the Managing Director of the Exchange in that behalf on a form which may be prescribed by the Board.
(b) (i) The applicant shall submit alongwith application,
(ii) A receipt of the Exchange for having made a deposit of Rs.2,000/- or such other sum as may be prescribed by the Board in that behalf as admission fee.
(iii) The applicant shall also submit to the Exchange alongwith his application the following :
a) A receipt of the Exchange for having made such other deposit with the Exchange in cash or kind as may have been prescribed or required in general or in particular by the Board by way of additional security for trading membership.
b) A recommendation in writing signed by two existing trading members of the Exchange supporting application.
c) Such other materials like Bank reference or other reference of credit as the applicant may choose to put in or as the Board may require in general or in particular.
d) On receipt of the application the Managing Director shall invite objections form the existing trading members against the enrollment, admission or election of the applicant as trading member of the Exchange by means of a notice pasted on the notice Board of the Exchange, and the objections, if any, may be filed within 15 days from the date of such notice.
e) After the expiry of the said 15 days the Managing Director shall put up the application before the Board for consideration together with such material by way of Bank reference of credit as may have been produced by the applicant or as may have been collected by the Exchange and such objections as may have been filed by the existing trading members against the enrollment, admission or election of the applicant as trading member of the Exchange.
f) The Board shall then proceed to consider the application in a meeting.
g) The Board may by a majority accept or reject the application or may impose such other condition as may be thought fit subject to which the application may be accepted or pass any such order which it may deem necessary or expedient.
h) Without prejudice to the general power of imposing any conditions given by Sub-clause (g) above, the Board shall have every right to call upon the applicant to deposit such additional security in cash or kind, or to furnish such additional guarantee as they by a majority think fit in their discretion.
i) In case the application is accepted but the applicant does not choose to be a trading member, the admission fee deposited by him shall stand forfeited to the Exchange.
j) The Managing Director shall paste a notice on the notice Board of the Exchange notifying such enrollment, admission or election of the new trading member as soon as his application for enrollment as a trading member is granted by the Board.
k) A new trading member thus enrolled, admitted or elected shall become entitled to exercise all rights and privileges of trading membership and be liable to all the liabilities and obligations of trading membership as soon as the notification of trading membership has been made as aforesaid.
l) The new corporate trading member shall comply with the terms and conditions and procedure regarding the enrollment, admission and election as a new Trading Member of the Stock Exchange, in addition to the requirements and the procedure contained in these Articles. A corporate trading member shall furnish a copy of the Memorandum and Articles of Association and / or its constitution and / or its Rules and Regulations, Bye-laws or other enactments applicable and its Corporate Resolutions authorizing such Corporate Trading Member to conduct the new business of Stock Broking as a Corporate Trading Member of the Stock Exchange or such other permissions necessary in law under the Companies Act, if applicable, together with a copy of the Board Resolutions appointing / nominating their Director(s) / authorized representative(s) to act, engage and deal on their behalf and also furnish a copy of the specimen signatures of such Director(s) / authorized representative(s) .
21. Every Trading Member, before he exercises the privilege of trading membership, such as doing business on the Exchange, shall be required to make a security deposit of Rs.10,000/- and shall maintain such deposit with the Exchange at all times he is carrying on business on the Exchange.
The said security deposit of Rs.10,000.00 (Rupees Ten Thousand only) shall form part of Base Minimum Capital / Capital Adequacy of the Trading member.
And provided that no security deposit shall be accepted otherwise than in the form of deposit of cash or deposit receipt of a scheduled bank or in securities of listed companies approved by the Board of Directors or in such other form as the Board of Directors may, with the previous approval of the Securities and Exchange Board of India, decide from time to time.
22. The Board of Directors may at any time after the date of admission cancel the admission and expel a trading member if he has in his application or at the time of consideration of his application for admission to trading membership or during the course of the enquiry made by the Board of Directors proceeding his admission :
(i) made any willful misrepresentation, or
(ii) suppressed any material information required of him as to his character and antecedents, or
(iii) has directly or indirectly given false particulars of information or made a false declaration.
23. Every trading member of the Exchange shall be bound to observe and comply with all the Rules, Bye-laws, Regulations, conventions, practices, resolution, orders, notices, directions, decisions or rulings of the Board, and general discipline of the Exchange.
24. The Board or any committee or Sub-Committee appointed for the purpose may call upon the trading members of the Exchange in general or any trading member or trading members in particular to furnish such new or additional security as they in their discretion think best and the trading member or trading members so called upon shall comply with the demand forthwith or within such time as may be fixed in the said demand.
25. A trading member shall not assign, mortgage, pledge, hypothecate or charge his right of trading membership or any rights or privileges attached thereto and no such attempted assignment, mortgage, pledge, hypothecation or charge shall be effective as against the Exchange for any purpose, nor shall any right or interest in any trading membership other than the personal right or interest of the trading member therein be recognized by the Exchange. The Board of Directors shall expel any trading member of the Exchange who acts or attempts to act in violation of the provisions of this Article.
26. A trading member can trade either in his own name or in a Firm’s name if he is a partner therein with another trading member or trading members of the Exchange, subject to the conditions laid in these presents.
27. The trading membership shall not be transferable except as provided by these rules.
PARTNERSHIPS
28. No partnership shall be formed except
a) between two or more trading members of the Exchange ; or
b) between a trading member of the Exchange and his
(i) Father or Mother; or
(ii) Son or Sons, or
(iii) Son’s son or Son’s sons or
(iv) Daughter or Daughters, or
(v) Spouse, or
(vi) Brother or Brothers, or
(vii) Any one or more of the above.
Provided that any of the above taken in partnership are otherwise in all respects eligible for trading membership without his or their acquiring individual trading membership of the Exchange and the qualification share already held by such trading member shall be considered sufficient to qualify the constituent member as trading member of the Exchange.
Provided further that no new (subsequent to the date of publication of Demutualisation Scheme i.e. 29th August, 2005) partnership will be allowed between two or more trading members and between trading member(s) and his/her/their family member(s) . However, a Partnership firm may obtain trading membership of the Exchange.
Provided further that a declaration shall have been given by all the partners of the firm to the effect that they are partners of such firm and that they shall be jointly and severally responsible to meet the obligations and commitments made by such firm, or by any partner or partners of such firm with other trading member or trading members of the Exchange.
And provided further that if at any time the constitution of such firm is changed, such change shall be intimated to the Exchange forthwith.
29. A fee of Rs.50/- shall be paid by the trading members concerned for recognition of their partnership by the Exchange.
30. No person shall at the same time be a partner in more than one such partnership firm.
31. (a) A trading member shall not borrow money or securities from a non- trading member on terms that the lender shall receive a rate of interest varying with the profits or a share in the profits of the said trading member.
(b) No partner in any partnership firm shall assign or in any way encumber his interest in such firm.
32. No trading member shall form a partnership or admit a new partner to an existing partnership or make any change in the name of an existing partnership without prior intimation to the Board of Directors and its consent, if necessary.
33. Notice of the formation of a partnership, the names of partners and every change therein shall be pasted on the notice board of the Exchange.
34. The Exchange shall maintain a register of partnerships, in the register of partnerships there shall be entered the name of partnerships recognized by the Exchange in accordance with these presents and the partners thereof together with their respective addresses, the date of recognition and any changes in the partnerships and names together with the relevant dates.
So long as the name of the firm is entered in the register of partnerships the individual partners thereof shall not carry on business separately or issue a contract in their separate names. The partners of the firm shall do business only on account of the firm and jointly. On intimation being received from a firm or any partner thereof, that any partner has retired from the firm, the change in the constitution shall subject to the provisions of Articles laid before, be noted in the register of partnership, and the member who has ceased to be a partner shall be entitled to carry on business in his own name and enter into contracts in his own name, but subject to payment of an additional deposit, if any, that shall be payable by him under the provisions of the Rules, Bye-laws and Regulations in that behalf.
(a) In the event of a Corporate trading membership any change in the Director(s) / Authorised representative(s) shall be with the prior intimation to the Board of Directors and their written consent, after placing on record their specimen signatures and other personal details.
BUSINESS NAMES
35. The Board of Directors shall refuse to allow a partnership firm to carry on business under a name which it considers misleading.
36. A partnership firm shall state on all correspondence relating to transaction of business and on all contract notes, the name of the firm and the names of all the partners therein.
37. (a) Any trading member desirous of carrying on business under a name and style different from his own name, shall apply to the Board of Directors for permission to do so.
(b) The Board of Directors shall refuse permission to a trading member to carry on business under a business name and style, which it considers misleading.
(c) A trading member who is a surviving or continuing partner of a partnership firm may, with the permission of the Board of Directors, continue business in the name of the firm of which he was a partner.
(d) Every Trading Member carrying on business under a business name as aforesaid shall state on all correspondence relating to transaction of business and all contract notes, in addition to the business name, the name of the trading member who is the sole proprietor thereof.
REGISTER OF BUSINESS NAMES
38. Where any trading member has obtained the permission of the Board of Directors to carry on business under a business name and style, the particulars thereof shall be entered in the register of business names.
TERMINATION OF TRADING MEMBERSHIP
39. Any trading member may cease to be a trading member :
(i) by resignation,
(ii) by death,
(iii) by expulsion in accordance with the provisions herein contained or under the Bye-laws and Regulations,
(iv) by being declared a defaulter in accordance with the Rules, Bye-laws and Regulations,
(v) by becoming an inactive trading member of the Stock Exchange,
(vi) if he fails to pay annual trading membership fees within 15 days from demand,
(vii) being a company, if ceases to maintain or have the characteristics of eligibility under the provisions of sub-Article 4 & 5 of Article 19 hereof,
(viii) if a Corporate Trading Member commits an act of insolvency resulting in a winding up action and the appointment of a Provisional Liquidator, or Official Liquidator or Receiver of the Corporate trading member being appointed.
40. (a) A trading member who intends to resign from the trading membership of the Exchange shall serve on the Exchange a written notice to that effect, a copy of which shall be pasted on the notice board of the Exchange by the Managing Director of the Exchange.
Provided that in case of a trading member which is a company or institution, such notice shall be accompanied by a copy of the resolution passed at a meeting of the Board of Directors resign and such copy shall be certified as true by the Chairman, if any, or by a whole time director of the company or institution.
(b) A trading member objecting to any resignation that has been notified shall communicate the grounds of his objection to the Board of Directors by letter within 14 days of the pasting of such notice.
(c) The Board of Directors may accept the resignation of a trading member either unconditionally or on such condition as it may think fit or may refuse to accept such resignation and in particular may refuse to accept such resignation until it is satisfied that all outstanding transactions with such trading member have been settled.
(d) On the death of a trading member, his legal representative, authorised assistants and remisiers, if any, shall communicate due intimation thereof to the Board of Directors in writing.
(e) On the winding up or insolvency of a Corporate Trading Member, the Official Liquidator or a Provisional Liquidator or Receiver, shall not be entitled to carry on business of a Trading Member and Trading Membership of such Corporate Trading Member shall cease. The Exchange shall recover/adjust the dues of such Corporate Trading Member from the assets of such Corporate Trading Member and the surplus, if any, would be handed over to the Provisional Liquidator / Official liquidator / Receiver.
RE-ADMISSION OF DEFAULTERS
41. A trading member’s right of trading membership shall lapse and vest in the Exchange immediately he is declared a defaulter. On a declaration of defaulter, he shall at once cease to be a trading member of the Exchange and as such cease to enjoy any of the rights and privileges of trading membership but the rights of his creditor trading members against him, shall remain unimpaired.
42. The Board of Directors may readmit a defaulter as a trading member subject to the provisions contained in these present rules and impose such other conditions as it may deem fit at the time of re-admission of a defaulter provided that the defaulter makes full payment of all amounts payable by him / her to the Exchange, SEBI and all other creditors in connection with contracts made subject to the rules, bye-laws and regulations of the Exchange within a period of one year from the date of his / her being declared as defaulter.
43. A notice of every application by a defaulter for readmission shall be pasted on the notice board of the Exchange for atleast 15 days previous to his re-admission.
44. Any trading member or any other creditor intending to object to the re-admission of the defaulter shall communicate the grounds of his objections to the Board of Directors by a letter within fourteen days of the date of pasting of the notice of the application for the re-admission. All such objections shall be deemed privileged and confidential.
45. Upon an application for re-admission by a defaulter, the Defaults Committee shall investigate his conduct and accounts and no further proceedings shall be taken by the Board of Directors with regard to his re-admission until the report of the Defaults Committee shall have been submitted together with a statement as to the defaulter’s estate signed by himself.
46. (a) The Board of Directors may re-admit only such defaulter who in its opinion –
(i) has defaulted owing to the default of principals whom he might have reasonably expected to be good for their commitments;
(ii) has not been guilty of bad faith or breach of the Rules, Bye-laws and Regulations of the Exchange;
(iii) has kept his business within a reasonable proportion of his means or resources; and
(iv) has been irreproachable in his general conduct.
(b) A defaulter shall not be eligible for re-admission unless he has made out of his own resources including his security and margin deposits, if any, a bonafide money payment of not less than thirty seven paise in the Rupee of the amount of loss he has incurred whether on his own account or that of principals and when his default is due to insolvency he shall not be eligible for re-admission unless he has paid 100 paise in the Rupee to his creditors whether they be trading members of the Exchange or not.
47. The provisions in those Rules, Bye-laws and Regulations relating to security deposit provided by a Trading Member on admission shall apply in all respects to security deposit provided by a defaulter subsequent to his re-admission to trading membership as prescribed herein.
Any defaulter so re-admitted shall not be required to pay the admission fee as prescribed in Article 20 but shall pay the admission fee of Rs.100/- provided that Board of Directors has not nominated any other person in exercise of its rights to nominate a successor to the defaulting trading member. But if such nomination had been made and the nominee admitted to trading membership, then the defaulter shall be readmitted only on payment of a fresh admission fee prescribed in these presents.
48 to 80. [deleted vide Special Resolution passed on 31.10.2009]
APPOINTMENT OF POWER OF ATTORNEY AND HIS RIGHTS
81. (a) Any trading member may give a Power of Attorney to any non-trading member to carry on or supervise his Stock Exchange business or to sign contracts on his behalf in respect of transactions in securities provided the person so appointed is atleast twenty one years of age and in all other respects eligible for election as a Trading Member and his appointment is previously approved by the Board of Directors.
(b) Any power of Attorney granted by the trading member and any substitutions thereof must be intimated to the Exchange and a copy of the power of Attorney filed with the Exchange.
(c) No substitute shall be appointed under a Power of Attorney given by a trading member unless the person proposed to be appointed as a substitute is atleast twenty-one years of age and is in all other respects eligible for election as a trading member.
(d) A register of Constituted Attorney shall be maintained by the Exchange in which shall be entered the names of the Constituted Attorneys and the names of the appointing trading members and the names of the substitutes together with the dates on which the authority is granted and rescinded.
(e) Noting contained in these Rules shall absolve the trading member granting the Power of Attorney, from responsibility for the acts of his attorney or substitute.
REPRESENTATIVE TRADING MEMBER
82. The Board may admit as representative trading member, any person authorized by some other trading member and who is eligible for trading membership under Sub-Rule (1) of Article 19.
(a) A representative trading member authorized by some other trading member shall enter into bargains in the market only in the name of such other trading member. He shall not enter into bargains in the market in his own name nor shall he be entitled to employ any authorized assistant.
(b) A trading member authorizing a representative trading member shall be responsible for all bargains entered into in the market by such representative trading member whether in the name of the trading member by whom he is authorized or in his own or any other name.
(c) A representative trading member shall be entitled to issue to his constituents contracts in his own name.
83. A register of representative trading members shall be maintained by the Exchange in which the names of the representative trading members and the names of trading members with whom they are so working together with the dates on which they commence and cease to work as such representative trading members, shall be entered.
(a) The terms and conditions in relation to a remisiers, as stipulated in Article 63 to Article 80 of the Articles of Association shall, mutatis mutandis, apply to the Corporate Trading Member, its Directors, its Executive Director and authorized representatives.
LIEN AND ITS ENDORSEMENT
84. There shall always be deemed to exist a paramount, continuing and floating lien and first charge in favour of the Exchange on the Share or Shares and on securities lodged in cash or otherwise by any trading member of the Exchange for payment of his liabilities towards the Exchange or trading members of the Exchange in respect of business done with other trading members of the Exchange and for the fulfillment of all commitments made by or on behalf of such trading member at any time during the continuance of his trading membership.
85. In order to exercise such lien or charge, the Board of Directors shall have the power to decide and determine the claims entitled to such lien or charge and for the enforcement of such claims, the Board may after notice sell or otherwise dispose of the share and / or security which is subject to the lien or charge as aforesaid, to any of the applicants for the trading membership of the Exchange at par value.
86. The sale or disposal of the share and / or security by the Board as aforesaid shall involve the extinction of all rights, title and interest of such trading member in such shares and / or security and also of all claims and demands against the Exchange in respect of the said share and / or security and all other rights incidental to the share except only such of those rights as are by these Articles expressly saved.
87. Save as herein otherwise provided, the Exchange shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not, except as ordered by a court of competent jurisdiction or as required by Statute, be bound to recognize any equitable or other claim to or interest or any other person in such share.
88. The Exchange shall have a first and paramount lien upon the share registered in the name of each shareholder and upon the proceeds of sale thereof for his debts, liabilities and engagements, solely or jointly with any other person to or with the Exchange, whether the period for the payment, fulfillment or discharge thereof shall have actually arrived or not and no equitable interest in any share shall be created except upon the footing and conditions that these Articles are to have full effect, and such lien shall extend to all payments out of profit from time to time declared in respect of such share. Unless otherwise agreed the registration of a transfer of such share shall operate as a waiver of the Exchange’s lien, if any, on such share.
89. For the purpose of enforcing such lien the Exchange may sell the share in such manner as it thinks fit, but no sale shall be made until notice in writing of the intention to sell shall have been served on such shareholder or after his death on his heirs, executors or administrators, or legal representatives, and default shall have been made by him or them in payment, fulfillment or discharge or such debts, liabilities or engagements for seven days after such notice.
90. The net proceeds of any such sale shall be applied in or towards satisfaction of the debts, liabilities or engagements of the defaulting trading member.
91. Upon any sale for enforcing lien in exercise of the powers herein-before given, the Board may cause the purchaser’s name to be entered in the Register of shareholders and the purchaser shall not be bound to see to the regularity of the proceedings nor to the application of the purchase money and after his name has been entered in the Register in respect of such share the validity of the sale shall not be liable to be impeached for any reason.
GENERAL MEETING
92. The quorum at a General Meeting shall consist of twenty shareholders present in person and entitled to vote.
93. No Trading Member, holding share(s) in the Exchange, shall be entitled to vote at any General Meeting or be reckoned in the quorum for such meeting whilst any subscription or other moneys shall be owing by such trading member to the Exchange or while the trading member’s name is posted on the list of defaulters or suspended trading members under any Rules and Bye-laws or Regulations for the time being in force.
94. The Chairman of the Exchange shall be entitled to preside at every General Meeting or if he is not present within 15 minutes after the time appointed for holding of the meeting, the shareholder present shall elect another Director present (who shall not be Trading Member Director) to preside over that meeting. SHAREHOLDING RIGHTS
95. A Member shall become a shareholder on the ‘Due Date’. The shareholding/voting rights shall be governed in accordance with the provisions of Section 87 of the Companies Act, 1956, subject to the following restrictions :
(a) UPSE shall ensure that atleast 51% of its equity shares are held by the public other than shareholders having trading rights, in the manner and within the period prescribed in sub-section (8) of section 4B of the SCRA.
(b) On and from the Appointed Date, UPSE shall ensure that public other than shareholders having trading rights continuously holds atleast 51% of equity shares.
(c) On and from the Due Date, no shareholder, who is a Trading Member, shall have voting rights (taken together with voting rights held by him and by persons acting in concert with him) exceeding 5% of the voting rights in UPSE.
BOARD OF DIRECTORS
96. The overall management of the affairs of the Exchange shall be vested in Board of Directors which shall consist of the following :
(1) Board Composition on and from Due Date till Appointed Date
On and from the Due Date i.e. 28th November, 2005 or on expiry of the term of Supersession under Section 11 of SCRA, 1956, whichever is later, the composition of the Board of Directors, consisting of 13 Members elected under the provisions of these Articles, shall be as under :
(a) Three Trading Member Directors;
(b) Nine Public Interest Directors; and
(c) One Managing Director.
(2) Board Composition on and from Appointed Date
On and from the Appointed Date, the composition of the Board of Directors, consisting of 13 Members elected under the provisions of these Articles, shall be as under :
(a) Three Trading Member Directors,
(b) Three Public Interest Directors,
(c) Six Shareholder Directors;
(d) One Managing Director.
Provided that a person being a Member/Trading Member of the Exchange who was on the Board of Directors of the Exchange at the time of Supersession would not be eligible for re-election to the Board of Directors of the Exchange for a period of two years from the date of expiry of the Order of Supersession passed by SEBI.
97. General Requirements
(1) The directors except the Chief Executive such as CEO, ED, MD etc and the Public Interest Directors, shall be elected by the Shareholders.
(2) No Director shall hold office for more than two consecutive terms.
(3) Trading Member Directors shall be elected from amongst the Trading Members.
(4) Shareholder Directors shall be elected from amongst the persons, who are not Trading Members or Associates of Trading Members.
'Associate’ in relation to a Trading Member, individual, body corporate or firm, shall include a person :
(i) who, directly or indirectly, by himself, or in combination with other persons, exercises control over the Trading Member, whether individual, body corporate or firm or holds substantial shares of not less than 15% in the capital of such entities, or
(ii) in respect of whom the Trading Member, individual or body corporate or firm, directly or indirectly, by itself or in combination with other persons, exercises control, or
(iii) whose director or partner is also a director or partner of the Trading Member, body corporate or the firm, as the case may be. The expression ‘control’ shall have the same meaning as defined under clause (c) of Regulation 2 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
(5) 'Public Interest Directors’ shall be “selected by the Governing Board” from amongst the persons in the SEBI constituted panel. A person shall not act as ‘Public Interest Director’ on more than one Stock Exchange simultaneously.
(6) The Chairman shall be elected by the Governing Board from amongst the non-executive non-trading member directors.
(7) The manner of election, appointment, tenure, resignation, vacation, etc. of Directors (Except the Managing Director) shall be governed by the Companies Act, 1956 save as otherwise specifically provided under or in accordance with the Securities Contracts (Regulation) Act, 1956.
(8) The Managing Director shall be an ex-officio Director on the Board.
98. SEBI may nominate Directors on the Board as and when deemed fit.
MANAGING DIRECTOR
99. The Board of Directors shall appoint a Whole Time Managing Director. The appointment, renewal of appointment and the termination of service of the Managing Director shall be subject to prior approval of SEBI. However, the Exchange shall determine the manner of selection, terms and conditions of appointment and other procedural formalities associated with the selection/appointment of Managing Director. While recommending the names to SEBI, the Exchange shall submit an undertaking that the necessary due diligence has been carried out by them with respect to the verification of antecedents, credentials and experience of the proposed persons. The Managing Director so appointed shall not be a trading member of any Stock Exchange and shall not engage himself in, and/or associate himself with any business directly or indirectly, during the period he holds office as Managing Director.
100. (i) It shall be the duty of the Managing Director to give effect to the directives, guidelines and orders issued by the Securities and Exchange Board of India in order to implement the applicable provisions of law, rules, regulations as also the Articles of Association, Regulations and Bye-laws of the Exchange. Any failure by the Managing Director in regard to the aforementioned duty will make him liable for removal or termination of service by the Exchange with the prior approval of the Securities and Exchange Board of India or on receipt of direction to that effect from the Securities and Exchange Board of India.
Provided that no action regarding the removal or the termination of service of the Managing Director shall be taken unless he has been given an opportunity of being heard against such removal or termination.
(ii) In absence of the Managing Director or on his inability to act, his functions and powers shall be exercised by senior available officer of the Exchange under the directions of the Board of Directors. ’
101. The Managing Director shall –
(i) be vested with executive powers to run day to day administration of the Exchange.
(ii) be an Ex-officio member of the Board of Directors.
(iii) be a member of every Committee or Sub-Committee appointed by the Board of Directors, and
(iv) represent the Exchange officially in any public matter under the directions of the Board of Directors.
102. Subject to the control of Board of Directors, the Managing Director shall have powers in matters which concern disciplining of trading and the trading member’s activities under the Articles, Bye-laws and Regulations of the Exchange, including the power to impose penalty not exceeding Rs.500/- and / or suspension of trading member or trading members from doing business for a period not exceeding seven days in case of violations of any Articles, Bye-laws and Regulations of the Exchange.
POWERS OF THE BOARD OF DIRECTORS
103. The Exchange may in General Meeting prescribe such regulations or provisions for the management of the business of the Exchange by the Directors as may be thought necessary but no such regulation or provision will invalidate any prior act of the Directors which would have been valid if that regulation or provision had not been in force.
104. The Board of Directors may at their discretion raise, borrow and / or secure the payment of any sum or sums of money for the purposes of the Exchange and raise or secure the payments of such sum or sums in such manner and upon such terms and conditions in all respects as they think fit whether by the issue of debentures or bonds charged on all or any of the assets of the Exchange or otherwise.
105. Subject to the provisions of the Securities Contracts (Regulation) Act, 1956 and the Rules framed thereunder, the Board of Directors is empowered to make Bye-laws and Regulations from time to time, for any or all matters relating to the conduct of the business of the Exchange, the business and transactions of its trading members between trading members inter as well as between its trading members and persons who are not trading members, and to control, define and regulate all such Stock Exchange transactions and without prejudice to the generality of the foregoing to make Bye-laws and Regulations for all or any of the following matters, namely :
(a) for the conduct of the business of the Exchange;
(b) for the conduct of the business of the trading members of Exchange with other trading members or with persons who are not trading members, and to govern all matters relating to all contracts for the sale and purchase of shares, securities, debentures and all Stock Exchange; Securities of all kinds between trading members and any person who is not a trading member and all contracts which are or have been made subject to the Rules, Bye-laws and Regulations, or usages of U.P. Stock Exchange Limited;
(c) to prescribe and define the consequences, effect and procedure to be followed on the suspension or expulsion of any trading member and on any trading member being declared a defaulter;
(d) to prescribe and provide that in the event of any trading member being suspended, expelled or declared defaulter, all pending contracts between such trading members and all other trading members of the Exchange be adjusted and closed irrespective of the period of performance for the said contracts not having expired, to provide and regulate and empower the Board of Directors or any committee thereof to fix the prices and rates at which such contracts shall be adjusted and closed and to provide that all monies arising out of and becoming payable by other trading members on such adjustment and closing of contracts shall be payable to the Defaults Committee of the Exchange and shall be paid into a 'special fund’ and that such 'special fund’ shall stand charged with and shall be utilized for payment of all debts, claims and dues by such defaulter, expelled or suspended trading member to any trading member in priority to all outside creditors.
106. Subject to the provisions of the Securities Contracts (Regulation) Act, 1956 and Rules framed thereunder, the Board of Directors shall have the power, from time to time, to vary, amend or repeal or add to the Bye-laws and Regulations framed in exercise of any powers conferred on the Board of Directors by these Articles and all such Bye-laws and Regulations shall come into force if the sanction of the Securities and Exchange Board of India if any, required by the Securities Contracts (Regulation) Act, 1956 and the Rules framed thereunder, has been previously obtained immediately on passing the same and otherwise immediately on such sanction being received.
107. Without prejudice to the general powers conferred by Articles 96 and 104 above and so as not in any way to limit or to restrict those powers and without prejudice to the other powers conferred by these presents it is hereby expressly declared that the Directors subject to the control of the Exchange shall have the following powers, that is to say:
(i) To purchase or otherwise acquire for the Exchange any property, rights or privileges which the Exchange is authorized to acquire, at such price and generally on such terms and conditions as they think fit, and sell, let, exchange or otherwise dispose of absolutely or conditionally any part of the property, privileges and undertaking of the Exchange upon such terms and conditions and for such consideration as they may think fit.
(ii) To acquire by purchase, lease or otherwise build, construct or erect any building or structures or premises for the Exchange.
(iii) To pay at their discretion, for any property, rights or privileges acquired by or for service rendered to the Exchange wholly or partially, in cash or in bonds, debentures, or other securities specifically charged upon all or any part of the property of the Exchange or not so charged.
(iv) To secure the fulfillment of any contracts or engagements entered into by the Exchange by mortgage or charge of all or any of the property of the Exchange and its uncalled capital, if any, or in any such other manner as they think fit.
(v) To appoint and at their discretion remove or suspend such Managing Director, company secretary, treasurers, officers, clerks and servants for permanent, temporary or special services as they may from time to time think fit and determine their powers and duties and fix their salaries or emoluments (if any) and to require security in such cases and for such amounts as they think fit and it is hereby declared that unless and until otherwise determined by the Board of Directors all cheques drawn on and Banking Account of the Exchange and all transfers of Government or other securities shall be deemed to be sufficiently signed for and on behalf of the Exchange if signed by any two or more of the Directors authorized by the Board in this behalf, and the Managing Director for the time being of the Exchange and / or any Directors authorized in this behalf by the Board shall have full powers to endorse on behalf of the Exchange all cheques, dividend warrants and other order for the payment of moneys.
Provided that no broker director shall be authorized to sign any cheque or operate any bank accounts on behalf of the Stock Exchange.
(vi) To appoint any person or persons whether incorporated or not to accept and hold in trust for the Exchange any property belonging to the Exchange or in which it is interested, or for any other purpose and to execute and do all such deeds and things as may be requisite in relation to any such trust and to provide for the remuneration of such trust or trustees.
(vii) To institute, conduct, defend, compound or abandon any legal proceedings by or against the Exchange or its officers or trading members or otherwise concerning the affairs of the Exchange and also to compound and allow time for payment or satisfaction of any such debts due and of any claims by or against the Exchange and to appoint attorney, agent, advocate for any such purpose.
(viii) To refer any claims by or against the Exchange to arbitration under the law governing arbitration and observe, perform and secure the observance or performance of the awards.
(ix) To make and give receipts, release and other discharges for money payable to the Exchange and for the claims of the Exchange.
(x) To appoint any persons to be the Attorneys or Agents of the Exchange with such powers (including power to sub delegate) and
upon such terms as may be thought fit.
(xi) To invest and deal with any of the funds of the Exchange not immediately required for purposes thereof in such securities of the Government of India or any State Government or Port Trust Bonds, Municipal Bonds, first debentures and cumulative redeemable preference shares of any reputable Joint Stock Company or such other securities authorized by law for investment of trust funds or by deposit at fixed rate of interest or any current account with any reputable bank as they determine and in such a manner as they may think fit and from time to time to vary or realize such investment.
(xii) To execute in the name and on behalf of the Exchange in favour of any member of the Board or other person who may incur or be about to incur any personal liability for the benefit of the Exchange such mortgages of the Exchange’s property (present and future) as they think fit and any such mortgage may contain a power of a sale and such other powers, covenants and provisions as shall be agreed upon.
(xiii) To set aside out of the profits of the Exchange such sums as they think proper as a Reserve Fund to meet contingencies or for repairing, improving and maintaining any of the property of the Exchange and for such other purposes as the Board shall in their absolute discretion think conducive to the interests of the Exchange and to invest the several sums so set aside upon such investments as they may think fit and from time to time deal with and vary such investments and dispose of all or any part thereof for the benefit of the Exchange and to divide the Reserve Fund into such special Funds as they think fit with full power to employ the assets constituting the Reserve Fund in the business of the Exchange and without being bound keep the same separate from the other assets.
(xiv) To enter into all such negotiations and contracts and rescind and vary all such contracts and execute and do all such acts, deeds and things in the name and on behalf of the Exchange as they may consider expedient for or in relation to any of the matter aforesaid or otherwise for the purpose of the Exchange.
(xv) To establish, maintain, support and subscribe to any charitable or public object or any institution, society or club which may be for the benefit of the Exchange or trading members of the Exchange or employees, or which may be connected with any town or place where the Exchange carries on business, to give pensions, gratuities, scholarships or aid to any trading member of the Exchange or to any person or persons who have served the Exchange or to the wives, children or dependents of such trading member or trading members, person or persons that may appear to the Directors just or proper whether any such person, his widow, children or dependents have or have not a legal claim against the Exchange.
(xvi) To set aside such portion of the profits of the Exchange to form a fund to provide for such pensions, gratuities, scholarships, aids or compensations or create any Provident or Benefit Fund in such manner as the Board may think fit but in conformity with law.
(xvii) To make and alter conditions concerning time and manner of payment of the contributions by the employees and the Exchange respectively to any such fund and the accrual, employment, suspension and forfeiture of the benefits of the said fund and the application and disposal thereof, and other wise in relation to the working and management of the said fund as the Board shall from time to time think fit.
(xviii) To make, amend, vary or repeal Rules, Bye-laws and Regulations from time to time for the regulation of the business of the Exchange, the admission and conduct of its trading members, officers and servants and the relationship between the trading members of the Exchange or between the trading members of the Exchange and their constituents.
(xix) To give decisions, awards or effect compromises or to review, revise or hear appeals against such decisions or awards, relating to all or any of the questions and disputes affecting the trading members of the Exchange, in making, settling or closing of bargain and their general conduct towards each other or towards third parties and to penalize such trading members as may be found guilty and with a view thereto, to appoint Arbitration Committee or Sub-Committee constituted from amongst the Board or any other trading members and to frame and enforce the Rules, Bye-laws and Regulations governing the principles and procedure to be followed by the Arbitration Committee or Sub-Committee and the parties to the proceedings before such Committees.
(xx) To conduct or supervise the business of banking as authorized by the Memorandum of Association if and when undertaken by the Exchange in terms of the Memorandum of Association and to do all such other acts and things as may be deemed by the Board to be expedient.
(xxi) To appoint/establish a Clearing Corporation and to transfer the duties and functions of the existing clearing and settlement functions of the Clearing House to a Clearing Corporation, recognized under the SCRA, within two years of the ‘Due Date’ decided for the purpose of Demutualisation, subject to prior approval of SEBI.
(xxii) To regulate and fix the scale of commission and brokerage to be charged by the trading members of the Exchange.
(xxiii) To do all such acts, deeds and things in the name and on behalf of the Exchange as they may consider expedient for or in relation to any of the matters, aforesaid or otherwise for the purpose of the Exchange.
(xxiv) To delegate all or any of the powers of the Board to any such Director, Officer or trading member or trading members of the Exchange for such specific purpose and in such specific manner as the Board may deem fit.
(xxv) To fix, vary and demand annual fees from such category of trading members as the Board may specify.
108. A trading member shall appear and testify before and cause his partners, attorneys, agents, remisiers, authorized assistants and employees to appear and testify before the Board of Directors, the Chairman or the Managing Director or before a Committee or officer of the Exchange authorized in that behalf such books, correspondence, documents, papers and records or any part thereof which may be in his or their possession and which may be deemed relevant or material to any matter under enquiry or investigation or which the Board of Directors in its absolute discretion deems necessary in the interest of just and equitable principles of trade or in public interest and welfare of the Exchange and its trading members.
QUALIFICATION AND ELECTION OF DIRECTORS
Eligibility Criterion for members of Governing Board
109. (a) At every Annual General Meeting of the Exchange, one third of each category of the members elected on the Board of Directors, shall be liable to retire by rotation, or if their number is not three or a multiple of three, then the number nearest to one third, shall retire from office, but the retiring members shall be eligible for re-election.
Provided that a person elected as a member for two consecutive terms, on the Board of Directors, shall not be eligible for re-election, for a further period of two years.
Provided further that a corporate trading member who has been a member of the Governing Board of the Exchange, through its representative, for two consecutive terms, shall not be eligible for re-election, on the Governing Board for a further period of two years.
For the purpose of this sub clause, in case of the conversion of individual trading membership into corporate trading membership, the tenure as a Director prior to conversion will also be counted.
(b) The members of the Board of Directors to retire by rotation at every Annual General Meeting, shall be those who have been longest in office since their last appointment, but as between persons who became Directors on the same day, those who are to retire shall, in default of, and subject to any agreement among themselves, be determined by lot.
110. (a) In case of an individual trading member :
No trading member shall be eligible to be elected as a member of the Governing Board if
i) He is not a citizen of India;
ii) He has been a trading member with less than three years standing on the last day for the submission of proposals by candidates for election;
iii) He has at any time been declared a defaulter or failed to meet his liabilities in the ordinary course or compounded with his creditors.
(b) In case of a corporate trading member :
None of the whole time designated Directors shall be eligible to be elected as a member of the Governing Board, if
i) He is not a citizen of India;
ii) He has been a trading member for less than three years standing on the last day for the submission of the proposals by candidates for election;
iii) He has at any time been declared a defaulter or failed to meet his liabilities in the ordinary course or compounded with his creditors.
(iv) In case the director resigns / retires from the Board of the trading member company, or is removed from the Board of such company, the post of such a company and the post of such director on the Governing Board falls vacant, the vacancy will be filled as per the rules of the Exchange and such a corporate trading member will not have the right to replace the member of the Governing Board.
(v) In case of the conversion of the individual trading member/partnership firm into a corporate trading member, then the previous experience of such an individual trading member who is a whole time director of the corporate trading member or a partner, of the firm would be considered for meeting the eligibility norms to become the member of the Governing Board.
(c) In the event the trading rights of the trading member or the registration of the trading member as a stock broker is suspended by way of disciplinary action by the Stock Exchange or SEBI, the trading member shall not be eligible to continue on the Governing Board and shall also not be eligible to be elected to the Governing Board for a period of two years from the date of expiry of the suspension of trading or the suspension of registration.
(d) A trading member whose registration has been cancelled shall not be allowed to continue on the Governing Board and shall not eligible to be elected to the Governing Board.
(e) The trading members falling in the category of notified persons as per the special courts (Trial of offenses relating to the Transaction in Securities) , Act, 1992 shall not be allowed to continue on the Governing Board for a period of two years from the date the person is de-notified under the special Courts (Trial of offences relating to the Transaction in Securities) , Act 1992.
110.A Multiple Trading Membership
In case of Multiple Trading Membership :
i) An individual trading member who is on the Governing Board of any other recognized Stock Exchange shall not be allowed to become a member of the Governing Board of this Stock Exchange.
ii) Only one of the whole-time (designated) Director of a corporate trading member can be allowed to be a member of the Governing Board of this Stock Exchange provided that the said Director is not on the Governing Board of any other recognized Stock Exchange.
111. The following shall be the procedure of election of Directors :
(a) All vacancies caused by the retirement of one-third Directors in each category shall be filled up by election by the shareholders of the Exchange by a secret ballot to be deposited in a ballot box by the shareholders in person immediately on receipt thereof at the General Meeting subject to the compliance of other provisions of these Articles of Associates and the Companies Act, 1956.
(b) Any individual trading members of the Exchange or any person who, though being a trading member of the firm, is a trading member of the Exchange shall be eligible for the election to the Board provided always that not more than one trading member of any such firm shall be a member of the Board at any one time; and
Provided that any such person who is not a retiring director, shall be eligible for appointment to the office of Director only if a shareholder intending to propose him has, not less than 14 days before the meeting left at the office of the Exchange a notice in writing under his hand signifying his candidature for the office or the intention of such a shareholder to propose him as a candidate for that office, as the case may be.
Provided further that any person (other than a person who has left at the office of the Exchange a notice under section 257 of the Companies Act, 1956 signifying his candidature for the office of a director) proposed as a candidate for the office of a director shall sign, and file with the company his consent in writing to act as a director, if appointed.
(c) For the purpose of filling up the vacancies thus caused all the retiring directors, except those who have intimated their intention not to contest the election by a writing delivered at the office of the Exchange atleast 7 days before the Annual General meeting and all other persons, otherwise qualified to be a director, in respect of whom the provisions of leaving a notice at the office of the Exchange as mentioned in para
(b) above have been complied with, shall form a panel from whom alone the candidates for election can be proposed and seconded at the Annual General Meeting for election as directors. Their names shall be notified by the Exchange by posting notices to all the shareholders of the Exchange and on the Notice Board not less than seven days before the meeting.
Provided that it shall not be necessary for the Exchange to serve individual notices upon the shareholders as aforesaid if the Exchange advertises such names not less than 7 days before the meeting in atleast two newspapers circulating in the State of Uttar Pradesh, of which one is published in English Language and the other in Hindi Language.
(d) At the Annual General meeting the names of the candidates shall be proposed and seconded by the shareholders of the Exchange individually out of the aforesaid panel of names only.
(e) If the total number of candidates thus only proposed and seconded is not more than the vacancies to be filled up; such candidates shall be declared elected; without any election or ballot taking place.
(f) If the total number of candidates thus proposed and seconded is more than the number of the vacancies to be filled up, then the election shall take place by secret ballot.
(g) The election shall take place immediately in the General Meeting or at such other time as may be fixed by the Chairman in the Annual General Meeting in which case the Annual General Meeting shall stand adjourned to such time after the election as may be fixed by the Chairman.
(h) The Board shall appoint a sub-Committee consisting of three persons, one out of each category to conduct the election and to act as Scrutineers and to report the result of their examination and the election to the annual General Meeting.
(i) Every shareholder of the Exchange present in person and desiring to vote shall be given at the time and place of voting a ballot paper on which the names of all such candidates as may be contesting the election shall have been printed or typed in Hindi and English languages. Each voting shareholder shall have a right to cast as many votes as the number of vacancies to be filled up but he shall not cast more than one vote in favour of any single candidate.
(j) Each voting shareholder at the time and place fixed for voting after making the requisite Cross Mark (X) on the ballot paper against the candidate(s) of his choice for election, shall deposit the same immediately thereafter in a ballot box provided for the purpose.
(k) The Scrutineers appointed above shall then after the expiry of the time for the voting, examine the voting cards and count the number of valid votes cast in favour of each candidate and report their result to the Annual General Meeting.
(l) All those candidates who may have secured the highest number of votes up to the number of vacancies shall be declared elected as Directors to fill the vacancies by the Chairman at the Annual General Meeting or the adjourned General Meeting as the case may be. In case of equality of votes cast to fill the last open vacancy the election shall be decided by the Scrutineers by drawing lots.
112. The Chairman of the Exchange shall be elected by the Governing Board from amongst the non-executive non-trading member directors.
113. The Chairman elected as per the provisions of Article 112 above shall hold office upto the conclusion of the first meeting of the Board of Directors held after the next Annual General Meeting.
114. In case of any casual vacancy in the office of the Chairman due to death, resignation or any other cause the Board of Directors shall elect a successor from among the members of the Board of Directors of the Exchange and such elected successor shall act as the Chairman, till the next Annual General Meeting.
115. Any casual vacancy in the Board of Directors from amongst its elected Directors may be filled up by the Board by appointing an eligible person for the respective category and the person so co-opted shall hold office until the next Annual General Meeting. Similarly, any vacancy caused by resignation or otherwise of any such co-opted Director may be filled up by the Board by appointing an eligible person for the respective category and the person so co-opted shall hold office until the next Annual General meeting.
116. (a) The office of a member of the Board of Directors shall become vacant in such cir
(i) If he suspends payment;
(ii) If he ceases to be a trading member of the Exchange
For the purpose of this sub-clause, conversion of individual trading membership into Corporate Trading Membership will not amount to cessation of trading membership.
(iii) If he resigns, by notice in writing addressed to the Board of Directors and such resignation is accepted by the Board of Directors;
(iv) If he is suspended or expelled; or if he is a director representing the corporate trading member and that corporate trading member ceases to be a trading member of the Exchange or is suspended or expelled.
(v) In case of a Corporate Trading Member,
a. if such a trading member ceases to be a trading member of the Exchange or is suspended or expelled; or
b. if the nomination of such a director is withdrawn by a corporate trading member; or
c. if he ceases to be a director of the corporate trading member.
In case of a vacancy in the office of the member of the Governing Board, as mentioned herein above such a member shall not have any right to nominate another person in his place as a member of the Governing Board.
(b) Board of Directors may appoint any trading member of the Exchange including a Corporate Trading Member through its nominated director as a director in the vacancy caused under clause (a) above until the next Annual General Meeting.
117. At every meeting of the Board, the Chairman of the Exchange shall preside. In absence of the Chairman, the Directors shall elect one of the Directors present, who is not a trading member, to preside at such meeting of the Board. As soon as the Chairman arrives, the Director so presiding shall vacate his chair in his favour.
118. The Board shall have powers to fix such remuneration of the Directors for attending meetings of the Board and its Sub-Committees and shall also have the powers to fix any remuneration or honorarium or such other allowances to be paid to the Chairman or any other Director or Directors who may have to perform or discharge any task or duty for and on behalf of the Board or the Exchange as they deem fit.
119. The Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit and may determine the quorum necessary for the transaction of business and until otherwise determined one-third of the total number of Directors (any fraction contained in that one-third being rounded off as one) shall form the quorum.
CODE OF CONDUCT FOR THE MEMBERS OF THE BOARD OF DIRECTORS
120. 1 A. For the purpose of determining as to whether an applicant to the Board of Directors of the Exchange is a fit and proper person [with reference to the SEBI (Criteria for Fit and Proper Person) Regulations, 2004], the Exchange shall take account of following:-
(a) Financial integrity;
(b) Absence of convictions or civil liabilities;
(c) Competence;
(d) Good reputation and character;
(e) Efficiency and honesty.
B. An applicant to the Board of Directors of the Exchange shall not be considered as a fit and proper person, if he incurs any of the following disqualifications:-
(a) The applicant has been convicted by a Court for any offence involving moral turpitude, economic offence, securities laws or frauds;
(b) An order for winding up has been passed against the applicant;
(c) The applicant has been declared insolvent and has not been discharged;
(d) An order restraining, prohibiting or debarring the applicant from dealing in securities has been passed by any regulatory authority and a period of 2 years from the date of expiry of the period specified in the order has not elapsed;
(e) The applicant has been declared defaulter or expelled;
(f) An order canceling the Certificate of Registration of the applicant has been passed by SEBI and a period of 2 years from the date of order has not elapsed;
(g) The applicant is financially not sound; and
(h) Any other reason, to be recorded in writing by the Exchange, which in the opinion, renders such applicant unfit.
2. The Directors shall :
(A) Meetings & minutes
a. not participate in the discussion of any subject matter in which any conflict of interest exists or arises, whether pecuniary or otherwise, and in such cases the same shall be disclosed and recorded in the minutes of the meeting.
b. not encourage the circulation of agenda papers during the meeting, unless circumstances so require.
c. offer their comments on the draft minutes and ensure that the same are incorporated in the final minutes.
d. insist on the minutes of the previous meeting being placed for approval in subsequent meeting.
e. endeavour to have the date of next meeting fixed at each Board Meeting in consultation with other members of the Governing Board.
f. endeavour that in case where all the items of the agenda of a meeting were not covered for want of time, the next meeting is held within 15 days for considering the remaining items.
(B) Strategic Planning
a. participate in the formulation and execution of strategies in the best interest of the Exchange and contribute towards pro-active decision making at the Board level.
b. give benefit of his experience and expertise to the Exchange and provide assistance in strategic planning and execution of decisions when the Board is in the throes of raging controversy.
(C) Regulatory Compliances
a. endevour to ensure that the Exchange abides by all the provisions of the SEBI Act, Securities Contracts (Regulation) Act, Rules, Regulations framed thereunder and the circulars, directions issued by the Government / SEBI from time to time.
b. endevour compliance at all levels so that the regulatory system does not suffer any breaches.
c. endevour to ensure that the Exchange takes commensurate steps to honour the time limit prescribed by SEBI for corrective action.
d. not support any decision in the meeting of the Board of Directors which may adversely affect the interest of investors and shall report forthwith any such decision to SEBI.
(D) General Responsibility
a. place priority for redressing Investor Grievances and encourage fair trade practice so that the Exchange becomes an engine for the growth of the securities market.
b. endevour to analyse and administer the Exchange issues with professional competence, fairness, impartiality, efficiency and effectiveness.
c. submit the necessary disclosures / statement of holdings / dealings in securities as required by the Exchange from time to time as per their Rules or Articles of Association.
d. unless otherwise required by law, maintain confidentiality and shall not divulge / disclose any information obtained in the discharge of their duty. Further, no such information shall be used for personal gains.
e. maintain the highest standards of personal integrity, truthfulness, honesty and fortitude in discharge of his duties in order to inspire public confidence and shall not engage in acts discreditable to his responsibilities.
f. perform his duties in an independent and objective manner and avoid activities that may impair, or may appear to impair, his independence or objectivity or official duties.
g. perform his duties with a positive attitude and constructively support open communication, creativity, dedication, and compassion.
h. not engaged in any act involving moral turpitude, dishonesty, fraud, deceit, or misrepresentation or any other act prejudicial to the administration of the Exchange.
DELEGATION OF POWERS TO COMMITTEES
121. Subject to the provisions of Section 292 of the Act, the Board of Directors may delegate any of its powers to committees consisting of such number of members not less than two in number as the Board of Directors may think fit. Any Committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may, from time to time, be imposed upon it by the Board of Directors.
ARBITRATION, DEFAULTS, DISCIPLINARY AND INVESTOR SERVICES COMMITTEES
122. (a) In addition to the Committees of the Board of Directors, if any, referred to in the above article, the Board of Directors shall, every year and as early as convenient after every Annual General Meeting, appoint the following committees, namely :
(i) Arbitration Committee
(ii) Defaults Committee
(iii) Disciplinary Committee
(iv) Investor Services Committee
(b) The Board of Directors may, from time to time, determine the number of persons to be nominated on each of such Committees.
(c) Appointment of Public Representatives on Statutory Committees
20% of the members on the statutory committees of the Exchange, that may be constituted from time to time, shall be nominated by the Board of Directors, from amongst the trading members of the Exchange and the balance 80% shall be persons other than the trading members of the Stock Exchange.
Provided, that the Arbitration Committee in case of disputes between a trading member and a non-trading member shall not have representation of the trading members.
(d) All members of the committee shall hold office from the date of their respective appointment till the first meeting of the Board of Directors held after the next Annual General Meeting.
Provided that if at the said meeting of the Board of Directors new members of the Standing Committees are not appointed the existing members shall continue until their successors are validly appointed by the Board of Directors.
(e) The Board of Directors may, from time to time, remove any member from the Committee and appoint any other person thereon in accordance with these presents.
(f) Any trading member of the Exchange nominated on any of such Committees shall vacate office if ;
(i) he ceases to be a trading member of the Exchange, or
(ii) he is suspended from the trading membership of the Exchange, or
(iii) he is declared a defaulter, or
(iv) he is expelled from the trading membership of the Exchange.
123. Subject to the Rules and provisions contained in these presents or any Rules, Bye- laws and Regulations of the Exchange, the proceedings of the Committee shall be regulated by the same rules as proceedings of the meeting of the Board of Directors.
124. Each Committee shall exercise such powers and duties and be subject to such Regulations, if any, as are sort out in its behalf by the Rules, Bye-laws and Regulations of the Exchange and subject thereto to any directions, bye-laws or Regulations that may be framed or made by the Board of Directors from time to time in that behalf.
125. Committee may meet and adjourn as it thinks proper. Questions arising at any meeting of a Committee shall be determined by a majority of votes of the members present, and in case of an equality of votes the Chairman of the meeting shall have a second or casting vote
COMPANY SECRETARY
126. The Board of Directors may appoint a Company Secretary to perform the duties which may be performed by Secretary under the Companies Act, 1956 and any other ministerial and/or administrative duties as may be entrusted upon him by the Board of Directors, from time to time.EMPLOYEES OF THE STOCK EXCHANGE
127. No employee of the Exchange shall be a party to or concerned in any speculative dealing on the Exchange or with any trading member of the Exchange.AUDIT
128. Once atleast in every year the accounts of the Exchange shall be examined and the correctness of profit and loss or income and expenditure account and balance sheet ascertained by one or more auditor or auditors. The provisions of the Companies Act, 1956 as the Auditors shall apply.AUDIT OF TRADING MEMBER’S ACCOUNT
129. Every trading member shall get his accounts audited by a Chartered Accountant whenever such audit is required by the Securities and Exchange Board of India.
COMMON SEAL
130. The Board of Directors shall provide for a common seal for purposes of the Exchange and shall provide for the safe custody of the Common Seal, and the Common Seal shall never be used except by the authority of a Resolution of the Board, and in the presence of two members of the Board who shall sign every instrument to which the seal is affixed and every instrument shall be countersigned by the Company Secretary or some other persons appointed by the Board.
BOOKS TO BE MAINTAINED BY THE STOCK EXCHANGE
131. The Stock Exchange shall maintain and preserve the following books of account and documents for a period of five years.(1) Minute books of the meetings of -
(a) Shareholders
(b) Board of Directors
(c) any standing committee or committees of the Board of Directors or of the general body of shareholders.
(2) Register of shareholders showing their full names and addresses.
(3) Register of authorized Clerks.
(4) Register of remisiers or authorized assistants.
(5) Record of security deposits.
(6) Margin deposits book.
(7) Ledgers.
(8) Journals.
(9) Cash Book.
(10) Bank Pass Book.
132. A resolution passed by circulation without any meeting of Directors appointed as aforesaid and evidenced by writing under the hands of not less than two-thirds majority of all the Directors or members of the Committee shall be as valid and effectual as a Resolution duty passed at a meeting of the Directors or of such Committee, called and held in accordance with the provisions of these Articles but all such resolutions passed by circulation shall, however, be brought to the notice of the Directors or the Committee at the very next meeting.
133. (a) The Board shall cause minutes to be fully entered in a book or books provided for the purposes :
(i) of the names of the Directors present at each meeting of the Directors and of any Committee of Directors as the case may be; and
(ii) of all resolutions and proceedings of General Meetings and of the meetings of the Directors and Committees.
(b) The record of any meeting of the Directors or of any Committee purporting to be signed by the Chairman of such meeting or by Chairman of the next succeeding meeting confirmation thereof shall be received as prima facie evidence of the matters stated in such minutes.
AGENDA
134. The agenda of the meeting will include such items as may be put in by the Managing Director of the Exchange. The Agenda may also include such other item as may be suggested in writing by a Director of the Exchange if so approved by the Chairman.NOTICE
135. A notice may be served by the Exchange upon any shareholder and or trading member either personally or by sending it through post addressed to such person at his such address as may be registered with the Exchange.136. Any notice, if dispatched by post, shall be deemed to have been served at the time when the letter containing the same would be delivered in the ordinary course of post and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed and put into the Post Office.
SECRECY
137. Every director, Managing Director, auditor, other officer, servant, accountant, trading member, representative, authorized assistant, remisier or other person employed in the business of the Exchange shall, before entering upon his duties, sign a declaration pledging himself to observe strict secrecy respecting all transactions of the Exchange with the others and the state of accounts with individuals and in matters relating thereto and shall by such declaration pledge himself not to reveal any of the matters which may come to his knowledge in the discharge of his duties except when required so to do by the Directors or by any meeting, or by Court of Law, or by the persons to whom such matters relate, and except so far as may be necessary in order to comply with any of the provisions in these presents contained.PROTECTION AND INDEMNITY
138. The Board may in their absolute discretion and in such manner as they may deem fit notify or cause to be notified the fact of any trading member of the Exchange having been expelled or become a defaulter or, been suspended, or ceased to be a trading member under these presents or under Rules or Bye-laws or Regulations of the Exchange. Such act shall not in any way amount to defamation of the trading member concerned.139. Subject to the provisions of Section 201 of the Companies Act, 1956, every Director and other officer or servant of the Exchange shall be indemnified by the Exchange against all costs, losses and expenses which any such trading member of the Board, officer or servant may incur or become liable to by reason of any contract entered into, or act or thing done by him as such trading member of the Board, officer or servant or in any way in the performance or discharge of his duties and it shall be the duty of the Board to pay the required costs, losses and expenses out of the funds of the Exchange.
140. No member of the Board or other officer of the Exchange shall be liable for the acts, receipts, neglects or defaults of any other member of the Board or officer of the Exchange or for any loss or expenses of the Exchange caused by deficiency of any security in or upon which any of the moneys of the Exchange shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortuous act of any person with whom any moneys, securities or effects shall be deposited or for any loss occasioned by any error of judgement or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his office or in relation thereto unless the same happens through his dishonesty.
141. No member of the Board or other officer of the Exchange shall be held personally liable in any manner for any act done, omission committed or orders passed, declaration issued or signed as such member of the Board or officer of the Exchange in the discharge of his duties as such.
ARBITRATION
142. All claims, complaints, differences and disputes between trading members arising out of or in relation to any bargains, dealings, transactions or contracts made subject to the Rules, Bye-laws and Regulations of the Exchange or with reference to any thing incidental thereto or anything to be done in pursuance thereof and any question or dispute whether such bargains, dealings, transactions or contracts, have been entered into or not shall be subject to arbitration as provided under the Bye-laws and Regulations and referred to the Arbitration Committee appointed by the Board under Article 122.DISTRIBUTION OF DIVIDEND, BONUS, ETC.
143. The profits of the Company, subject to the provision of these articles shall be divisible amongst the shareholders in proportion to the amount of Capital paid up on the shares held by them respectively. However, the Company shall not issue any share or make payment of any dividend to shareholders, out of the reserves and assets (of the Company) existing on the date of publication of Demutualisation Scheme.UTILISATION OF ASSETS AND RESERVES
144. UPSE shall not do anything contrary to the provisions of Section 4B(3) of the SCRA and, without prejudice to the generality of provisions of Section 4B(3) of the SCRA, UPSE shall not use its assets and reserves as on 29th August, 2005 (the date of publication of Demutualisation Scheme) or the proceeds from disposal of such assets or the proceeds from disposal of successive species of assets acquired from the proceeds of disposal of such assets for any purpose other than discharging the current liabilities outstanding as on 29.08.2005 or the business operations of the Stock Exchange. ’WINDING UP
145. If the Company is wound up, the assets of the Company shall be distributed amongst the shareholders in proportion to the amount of Capital paid on the share held by them as per the provisions of Companies Act, 1956. However, the assets and reserves of the company, existing on the date of publication of Demutualisation Scheme, shall not be available for distribution amongst the shareholders of the Company.
| Sl. No. |
Names of the Subscribers and Occupation |
Address |
Witness |
| 1. |
Ram Gopal Sharma S/o Paras Ram Sharma (Business) |
120/543, Shivaji Nagar, Kanpur |
Dr. Arjun Dev Kapoor (Medical Practitioner) S/o.Mithan Lal Kapoor, 16/95, Mall Road, Kanpur – 208001 |
| 2 |
Anguri Rani Sharma W/o Paras Ram Sharma (Business) |
120/543, Shivaji Nagar, Kanpur |
|
| 3. |
Padam Kumar Jain S/o Late Bhog Chand Jain (Business) |
26/64, Birhana Road Kanpur |
|
| 4. |
Chandra Nath Tewari S/o Bishwambhar Nath Tewari (Service) |
125/32-L,Govind Nagar Kanpur |
|
| 5. |
Shri Kant Bajpai S/o Ganga Mangal Bajpai (Service) |
106/388, P.Road Kanpur |
|
| 6. |
Surendra Singh Jain S/o Late Jyoti Prasad Jain (Service) |
181-A, Block-N Kidwai Nagar Kanpur |
|
| 7. |
Brijendra Kumar Garg S/o Chottey Lal Garg (Service) |
106/155-A, Ram Park, Gandhi Nagar Kanpur |
Dated the 8th day of October, 1979.