Application for Surrender of Membership/Dealership

APPLICATION FOR SURRENDER OF MEMBERSHIP/DEALERSHIP

Members/Dealers desirous of surrendering the membership/dealership are advised to send their request in the prescribed formats (as enclosed) with the following documents:

1. Letter/application to OTCEI requesting for surrender of Membership/Dealership signed by individual/ all the partners/ two directors. (as per enclosed format, Annexure I)
2. Board Resolution (signed by two directors wherever applicable)
3. Original SEBI certificate along with a letter addressed to SEBI requesting for the cancellation of the SEBI registration. (letter to SEBI as per format Annexure II)
4. Original SEBI certificates of all sub-brokers affiliated to it for OTCEI operations, requesting for cancellation of the SEBI registration.
5. An Indemnity on stamp paper of Rs. 200/- (as per format, duly notarised Annexure III)

The Procedure & Policy for surrender of membership/dealership is as follows:

1. The application/request for surrender of membership/dealership not submitted as per the prescribed format and not accompanied by the above documents will not be considered.

1. On surrender of membership/dealership, the Members/Dealers will not be refunded any amount paid by them, to OTCEI, towards admission fees, Technology cost/fees, Fees for trading in permitted securities segment, the annual dealership/ membership fees or any other fees/ costs paid by them. They shall however be refunded, after a period of one year, only with amount, if paid, towards Base Minimum Capital and Settlement Deposit, after deducting the outstanding dues, if any, owed by them to the Exchange. However, members/dealers who are not registered with SEBI and who were never active on OTCEI, shall be refunded with settlement deposit and base minimum capital immediately, upon receipt of approval from OTCEI board/committee and SEBI.

1. Members/Dealers may kindly note that upon receiving the requests for surrender and finding their application for surrender in order, their trading facility will be withdrawn. All the members/dealers may therefore ensure that they shall not maintain any open positions at the end of each settlement period after submission of the request for surrender.

1. All the VSATs and other equipments given to them by the Exchange should be returned within one month from the date the Exchange accepts their request for surrender. For this purpose, the members/dealers are required to indicate the name of the contact person who would be available at each of their dealing offices so as to ensure a smooth dismantling and recovery of the VSAT and other equipments. Consequent to the withdrawal of VSAT, members/dealers shall obtain their obligation details regularly from NSCCL/OTCEI and meet their obligations promptly.

1. Charges in respect of VSAT shall be levied only up to the date of receipt by the Exchange of a complete application for surrender or the date of last trade by the members/dealers, whichever is later. However, in case of any delay in removal of VSAT and the related equipment on account of the failure on the part of the Member/Dealer to facilitate the removal, charges in respect of VSAT shall be levied up to the date of actual removal. Levy of VSAT charges in the manner aforesaid shall be with immediate effect.

1. It shall be at the discretion of the Exchange to accept/reject the request of surrender of membership/dealership. The decision of the Exchange w.r.t surrender is final and binding on the member/dealer.

1. The member/dealer whose request of surrender gets accepted by the Exchange shall surrender all unused stationery belonging to the Exchange and stop soliciting business on behalf of the Exchange. In case a member/dealer is a market maker in any of the scripts, then the surrender shall take place after he ceases to be a market maker and in accordance with the listing norms of the Exchange.

1. In cases where member/dealers are not registered with SEBI, OTCEI would refund the settlement deposit and amount towards capital adequacy, once the surrender is approved by the OTCEI board.

1. In cases where member/dealers are registered with SEBI, OTCEI would refund the settlement deposit and amounts remitted towards capital adequacy, after a period of one year upon receipt of approval of surrender by the OTCEI board.

1. An application for surrender shall not be allowed to be withdrawn except unless approved by the Exchange at its discretion.

1. The company objections reported, against a Member/Dealer whose application for surrender has been approved, will be initially valued by NSCCL/OTCEI at a notional price. The concerned Member/Dealer shall be required to remit the notional amount so calculated, by the prescribed date and such company objections shall be closed-out as per the procedures. The respective Member/Dealer shall meet all such objections by remitting the relevant amount to NSCCL/OTCEI within the stipulated 21 days from the date of reporting of such company objections, or within 10 days of intimation of the notional amount payable, whichever is earlier. As an option, the Member/Dealer may deliver shares in dematerialized mode in replacement of company objections reported. If the Member/Dealer does not meet his obligation, such company objections would be met out of his capital adequacy which may be in the form of cash, fixed deposits/Bank Guarantee etc.. Consequently, if 85% of the value of the interest free cash security deposits and the available security deposit gets utilised, and if the Member/Dealer does not bring in funds to meet the balance company objections, then such Member/Dealer shall render himself liable to being declared a defaulter.

1. Members/Dealers whose applications for surrender of dealership/membership have been approved are subjected to all the stipulations/conditions set forth by the Exchange/NSCCL herein and hereafter and as may be decided from time to time. Approval of surrender of membership/dealership shall remain conditional upon due compliance by the concerned Member/Dealer with all their obligations under the Rules/Regulations/Bye-laws of the Exchange/NSCCL, including in particular arbitration awards and valid investor grievances/claims against them.

1. Upon approval as aforesaid, the concerned Members/Dealers shall not be entitled to any rights or privileges accorded under the Bye-Laws, Rules and Regulations of the Exchange, but shall continue to be liable to meet their liabilities/obligations under the Bye-Laws, Rules and Regulations of the Exchange/NSCCL.

1. Applications for surrender received by the Exchange shall be processed at intervals and, upon being approved, the Exchange shall notify to all the Members/Dealers the fact of approval of surrender. The concerned Member/Dealer whose applications have been approved shall also be informed of the approval and intimated of the terms and conditions subject to which their surrender has been approved. A notice to the public, by the Member/Dealer, by way of a publication in newspapers shall also be given except where the Member/Dealer has not traded on the Exchange.

1. The Exchange shall not permit any member/dealer who has surrendered his membership/dealership or their partners (in case of partnership firm) or dominant shareholders (in case of corporate) to be readmitted as a Member/Dealer of the Exchange in any form for a period of five years from the date of cessation of Membership/Dealership.

1. The Exchange, at its sole discretion, may waive, modify or relax any one or more of the above requirements wherever appropriate.

1. Upon such a Member/Dealer being declared a defaulter/suspended, all the process applicable to that of a surrendered member/dealer shall cease ipso facto and the relevant process pertaining to a defaulter shall forthwith commence/apply.

Annexure I

(Entire application on Members/Dealers Letter-head)

Application for Surrender of Membership/Dealership of OTC Exchange of India.

To,Date :

The Managing Director

OTC Exchange Of India

92, Maker Towers F

Cuffe Parade

Bombay 400 005

Dear Sir,

Sub.: Surrender of Membership/Dealership.

Name of the Member/Dealer :

SEBI registration number :(Certificate enclosed)

1. I/We ______member/dealer on the OTC Exchange of India having registered office at ______have decided to surrender our membership/dealership, on OTCEI.

1. * The Board of Directors of our company has at its meeting held on ______decided to surrender our Membership/Dealership of OTC Exchange of India. The certified copy of the relevant Board resolution is hereby enclosed for your kind perusal and records. We, accordingly submit this application to OTCEI expressing our desire to surrender our Membership/Dealership of OTCEI.

1. We are also enclosing the original SEBI certificate along with a letter addressed to SEBI for cancellation of our registration as stock brokers of the OTCEI.

1. We also undertake to submit all other papers/documents as the Exchange may require/demand in this connection. However, the request for surrender should be processed by the Exchange, which is irrevocable and unconditional.

1. We agree that the Exchange can withdraw our trading facility without any notice upon finding our request in order.

1. We undertake not to keep any open positions at the end of each settlement period hereafter and if any such open positions so remain after the said withdrawal of the trading facility, the Exchange / NSCCL is hereby authorised to close out the positions at any time they deem fit without any prior intimation.

1. We are also informing all our Sub-brokers of our decision to surrender our Membership/Dealership and are accordingly directing all our sub-brokers registered with SEBI, for OTCEI operations, to stop soliciting business as our sub-brokers. We have obtained and are submitting to you all the original sub-broker registration certificates for onward transmission to SEBI for cancellation of the registration, along with the letters from the following sub-brokers addressed to SEBI for cancellation of their registration.

Name of the sub-brokerSEBI Registration No.

1.

2.

1. We request you to kindly remove the VSAT and other equipment given to us at our various dealing offices. The following are the names of our representatives who will be acting on our behalf at the respective dealing centers who will enable you to withdraw the VSATs and other equipment.

Dealing CentersName of the representative

1.

2.

(Please strike out point no. 8 if you have not taken a VSAT from OTCEI/NSE for OTCEI operations)

1. We agree that the approval of our surrender is subject to our clearing of all liabilities /obligations / dues towards OTCEI / NSCCL/ SEBI.

1. We have made a deposit of Rs. ______towards Capital Adequacy (including Rs. 25,000/-being refundable Settlement Deposit) in the form of cash/securities/bank guarantees/fixed depositsand we hereby authorise OTCEI to refund to us the said Capital Adequacy of Rs. ______after debiting there from our dues to OTCEI/NSCCL, if any.

OR

We have made a payment of Rs. 25,000/- to OTCEI towards settlement deposit vide cheque/dd no. ______dated ______and we hereby authorise OTCEI to effect refund of our settlement deposit, after deducting all our outstanding dues, through an A/c. payee cheque drawn in our favour.

(Please write point no. 10 according to what you have paid. If you have not paid the settlement deposit nor paid the capital adequacy please strike out point no. 10.)

1. We also undertake to remit all the turnover fees to SEBI and proof of the same shall be provided to the Exchange authorities.

1. We also undertake to remit the balance insurance premium, if any, in respect of all the previous policy periods as well as the current policy and submit to you the NOC from the insurance company.

1. We hereby declare that we shall abide with all the terms and conditions stipulated by the Exchange from time to time and extend full co-operation to the officials of the Exchange including allowing them to inspect our books of accounts, pertaining to transactions done by us during the period of our membership/dealership even after the said surrender.

1. We understand and accept that on surrender of membership/dealership, OTCEI will not refund any amount paid by us towards Admission fees, Technology fees, Fees for trading in permitted securities segment, the annual dealership/membership fees or any other fees/costs paid to OTCEI, which are all non-refundable in nature. We shall however accept the refund of Base Minimum Capital and Settlement Deposit, after the Exchange deducts the outstanding dues, if any.

We further understand that the surrender of membership/dealership will take effect upon completion of all procedural formalities as stipulated by the Exchange.

Thanking you,

Yours faithfully,

______

Name of Member/Dealer Company common seal

1.

2.

# In the case of partnership firm, the surrender application and request letter shall be

signed by all the partners.

# In the case of Corporate, the surrender application and request letter shall be signed by

atleast two Directors and will be affixed by Company Seal.

* This clause is not applicable in case of individual/partnership members/dealers.

Annexure II

Application for cancellation of original SEBI registration certificate consequent to surrender of our membership/dealership. (to be routed through OTCEI, entire application on Company Letter-head)

To,Date:

The Executive Director

Secondary Market Department

Securities and Exchange Board of India

SEBI Bhawan, Plot No.C-4A, G-Block,

Bandra Kurla Complex

Bandra East, Mumbai - 400 051

Dear Sir,

Sub.: Cancellation of original SEBI registration certificate.

Name of the Member/Dealer :

SEBI registration number and date :

1. I/We ______member/dealer on the OTC Exchange of India having registered office at ______have decided to surrender our membership/dealership, on OTCEI.

1. * The Board of Directors of our company has at its meeting held on ______decided to surrender the, Membership/Dealership of OTC Exchange of India. A certified true copy of the relevant Board Resolution is hereby enclosed.

1. We undertake to inform all our Sub brokers of our decision to surrender our Membership/Dealership and are accordingly directing all our sub brokers registered with SEBI, for OTCEI operations, to stop soliciting business as our sub-brokers. We are enclosing original sub-broker registration certificates along with the letters addressed to SEBI, for cancellation of the registration.

Name of the sub-brokerSEBI Registration No. & Date

1.

2.

1. The details of turnover based fees remitted by us to SEBI so far are as under:

Fee related to transactions on OTCEI / Payable in the year / Turnover
(Column 1) / Fee paid / Date of fee remittance / Payment Details (Demand Draft no., date & Bank)
1991-92 / 1992-93
1992-93 / 1993-94
1993-94 / 1994-95
1994-95 / 1995-96
1995-96 / 1996-97
1996-97 / 1997-98
1997-98 / 1998-99
1998-99 / 1999-00
1999-00 / 2001-02
2001-02 / 2002-03
2002-03 / 2003-04
2003-04 / 2004-05
2004-05 / 2005-06
2005-06 / 2006-07

As per annexure

We further undertake to remit all the turnover fees to SEBI and produce to the Exchange proof of the same.

We request SEBI to cancel our SEBI registration certificate which is enclosed herewith, and request SEBI to inform OTCEI to refund our settlement deposit and amount deposited by us towards capital adequacy.

Yours faithfully,

______

Name of Member/Dealer

1.

2.

* not to be filed if the member/dealer is in individual/partnership capacity

Annexure III

Stamp Paper Rs. 200/-, duly notarised

THIS INDEMNITY made at <Place>, this ____ day of ______, 199_____ by <name of the dealer> s/o, d/o, w/o ______, residing at ______and having my office at ______, hereinafter called ‘the Member/Dealer’ (which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include their heirs, legal representatives, successors and assigns)

(Incase the dealer has the dealership in Individual capacity)

OR

THIS INDEMNITY made at <Place>, this ____ day of ______, 199_____ by <name of the dealer>, a Partnership firm registered under the Indian Partnership Act, 1932 and having our office at ______, hereinafter called ‘the Member/Dealer’ (which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include their heirs, legal representatives, successors and assigns)

(Incase the dealer has the dealership as a Partnership entity)

OR

THIS INDEMNITY made at <Place>, this ____ day of ______, 199______by

<name of the member/dealer> Limited, incorporated as a company under the Companies Act, 1956 and having registered office at ______, hereinafter called ‘the Member/Dealer’ (which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include their heirs, legal representatives, successors and assigns) (In case the membership/dealership is in corporate entity)

TO

OTC EXCHANGE OF INDIA, a company incorporated under section 25 of the Companies Act, 1956 and having its registered office at 92, Maker Tower ‘F’, Cuffe Parade, Mumbai 400005, hereinafter referred to as ‘OTCEI’ (which term so far as the context will admit will include its executors, administrators and assigns).

WHEREAS, I/We the said Dealer/Member was/were appointed as a Dealer /Member of OTC Exchange of India;

AND WHEREAS I/We the said Dealer/Member having already paid Admission Fees and other related fees and having been granted SEBI Registration have now represented to the Exchange for surrender of our Dealership/Membership;

AND WHEREAS at my/our request and representation to the Exchange that I am/ we are unable to continue OTCEI operations, the Exchange has considered my/our request and agreed to accept my/our request for surrender of my/our Dealership/Membership;

NOW THIS INDENTURE WITNESSETH that in pursuance of the said Agreement and in consideration of the premises, I/we, the Dealer/Member hereby agree(s) and binds himself/themselves at all times hereafter to save harmless and keep indemnified the Exchange from and against all actions, causes, suits, proceedings, claims and demands whatsoever, including any liabilities arising from any quotations, transactions done or trades effected, both past and future, which may arise/have arisen during the course of my/our activities as Dealer/Member of the Exchange and all costs, expenses incurred in respect thereof and all such costs, charges, expenses and sums of money incurred in respect of the said Dealership/Membership activities and/or trading activities, due to which the Exchange may suffer, incur or be put to any loss by reason of or in consequence of the surrender of the Dealership/Membership or otherwise howsoever in relation thereto;