Powers of Stock Exchange

A recognized stock exchange will have the following powers with the approval of Securities and Exchange Board of India.

Powers of Stock exchange

Image: Powers of Stock exchange

Powers of Stock exchange

1. Prescribing hours of trade.

2. Procedure for clearing house for settlement of transactions, delivery and payment for securities.

3. Submission of report by the clearing house periodically to SEBI with regard to details of various classes of securities.

4. Rules pertaining to prohibition of blank transfers. When securities are traded, the buyer must receive the security and send it for transfer in his name after signing the transfer document. However, if the buyer keeps the transfer document blank and further sells it to other buyer, then it is a blank transfer.

5. Different classes of contract and the payment to the clearing house.

6. Fixing, altering or postponing settlement dates.

7. Fixing of prices such as opening, closing, high and low.

8. Prescribing margin requirements for different contracts.

9. Regulating termination of contracts between members.

10. In case of default or insolvency of seller or buyer, procedure for dealing with such contracts.

11. Procedure for listing securities in stock exchange.

12. Settlement of disputes.

13. Fixing of fees, fines and penalties.

14. Fixing broker commission.

15. In case of syndicate transaction or cornering or pool which is illegal, fixing of prices on securities.

16. Separating the functions of jobbers and brokers.

17. Limiting the volume of trade by individual members.

18. Obligation on the part of members to furnish information as required by the governing body.

The bye-laws will specify penalties or punishment for non compliance of rules by members. They may also state the grounds for suspension or expulsion of members from the Stock exchange. These bye-laws are subject to approval by
SEBI.

If the bye-laws of the stock exchange are not satisfactory or require are some amendments, SEBI will recommend due corrections in the bye-laws. Sometimes, the Stock exchange may object to the corrections made by SEBI, in such cases, representations will be heard by SEBI for making due corrections.

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