Corporate Membership :

Sub-rule 4 provides that a company as defined in the Companies Act, 2013, shall be eligible to be elected as a member of a stock exchange if –

(i) such company is formed in compliance with the provisions of Companies Act, 2013.

(ii) a majority of the directors of such company are shareholders of such company and also members of that stock exchange; and

(iii) the directors of such company, who are members of that stock exchange, have ultimate liability in such company;

However where SEBI makes a recommendation in this regard, the governing body of a stock exchange shall, in
relaxation of the requirements of this clause, admit as member the following corporations, bodies corporate
companies or institutions, namely–

(a) the Industrial Finance Corporation, established under the Industrial Finance Corporation Act, 1948;

(b) the Industrial Development Bank of India, established under the Industrial Development Bank Act, 1964;

(c) any insurance company granted registration by the Insurance Regulatory Development Authority under the Insurance Act, 1938;

(d) the Unit Trust of India, established under the Unit Trust of India Act, 1963;

(e) the Industrial Credit and Investment Corporation of India, a company registered under the Companies Act, 2013;

(f) the subsidiaries of any of the corporations or companies specified in (a) to (f) and any subsidiary of the State Bank of India or any nationalised bank set up for providing merchant banking services, buying and selling securities and other similar activities;

(g) any bank included in the second schedule to RBI Act, 1934;

(h) the Export Import Bank of India, established under the Export Import Bank of India Act, 1981;

(i) the National Bank for Agriculture and Rural Development, established under the National Bank for Agriculture and Rural Development Act, 1981 and

(j) the National Housing Bank, established under the National Housing Bank Act, 1987.

(k) Central Board of Trustees, Employees’ Provident Fund, established under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

(l) any pension fund registered or appointed or regulated by the Pension Fund Regulatory and Development Authority under the Pension Fund Regulatory And Development Authority Act, 2013; and

(m) any Standalone Primary Dealers authorised by the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934.

According to sub-rule 4A a company as defined in the Companies Act, 2013, shall also be eligible to be elected
as a member of a Stock Exchange if –

(i) such company is formed in compliance with the provisions of section 3 of the said Act;

(ii) such company undertakes to comply with such financial requirements and norms as may be specified by SEBI for the registration of such company under sub-section (1) of section 12 of SEBI Act, 1992;

(iii) the directors of the company are not disqualified for being members of a stock exchange except clause (1) of sub-clause (b) and sub-clause (f) thereof or clause (3) except sub-clause (a) and sub-clause (f) thereof and the Director of the company had not held the offices of the Director in any company which had been a member of the stock exchange and had been declared defaulter or expelled by the stock exchange; and

(iv) 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.

Sub-rule 5 provides that where any member of a stock exchange is a firm, the provisions of sub-rules (1), (3) and (4), shall, so far as they can, apply to the admission or continuation of any partner in such firm. Sub-rule 6 lays down that a limited liability partnership as defined in the Limited Liability Partnership Act, 2008, shall also be eligible to be elected its a member of a stock exchange if:

(i) such “limited liability partnership” undertakes to comply with such financial requirements and norms as may be provided by SEBI for registration of such limited liability partnerships under sub-section (1) of section 12 of the SEBI Act, 1992;

(ii) the designate partners of the ‘limited liability partnership’ are not disqualified from being members of a stock exchange under sub-rule (1) [except clause (b) and (f) thereof or sub-rule (3) except clause (a) and clause (f) thereof and the designated partners of the ‘limited liability partnership’ had not held the offices of Directors in any company or body corporate or partner in any firm or ‘limited liability partnership’, which had been a member of the stock exchange and had been declared defaulter or expelled by the stock exchange; and

(iii) not less than two designated partners of the ‘limited liability partnership’ are persons who possess a minimum experience of two years:-

(a) in dealing in securities; or

(b) as portfolio managers; or

(c) as investment consultants.

Sub-rule 7 lays down that any provident fund represent by its trustees, of an exempted establishment under the Employee’s Provident Funds and Miscellaneous Provisions Act, 1952, shall be also be eligible to be elected as
a member of a stock exchange.