Organizational Structure of Stock Exchanges in India
The recognized stock exchanges in India vary in their organizational structure. Some of them are non profit making organizations, as companies limited by shares and companies limited by guarantee, though there was some uniformity in their functioning and structure. However, with the advent of SEBI, we find more uniformity in the organizational structure of various stock exchanges.
As per the present guidelines of SEBI, stock exchanges can be set up in areas which are not only industrially developed but must be able to attract atleast 50 companies independently. In Tamilnadu, since Coimbatore and Madurai have fulfilled the above condition, they have stock exchanges.
Admission of members in recognized stock exchanges
The Securities Contracts (Regulation) Act, 1956 lays down conditions for members of stock exchange.
1. Anyone wishing to become a member should be an Indian citizen and should have attained 21 years of age.
2. He has to be recommended by two members, none of whom should be a member of the governing board.
3. He has to deposit a sum of Rs. 20,000 in cash or approved security.
4. He should not be a bankrupt or convicted for fraud or dishonesty.
5. He should pay an entrance fee that may vary from time to time.
6. He should have worked for atleast two years as partner with other member of stock exchange. He may be an authorized clerk or remisier or apprentice to any other member.
7. He should agree to work for two years as partner or as representative with other members or he should succeed to the established family business.