Nse Members Seek Rs 25-Lakh Personal Guarantee Limit

The Association of NSE Members of India has suggested to the National Stock Exchange that the proposed personal guarantee to be collected from the dominant partner of the corporate member be limited to Rs 25 lakh.

The association has further suggested that this guarantee should be solely for the introduction of fake/forged or stolen shares in the market.

The association has also decided to announce a cash reward of about rupees one lakh to anybody willing to help in providing concrete evidence against those who print fake certificates.

In a letter written to Ravi Narain, deputy managing director of the National Stock Exchange, the association has suggested that the corporate trading member should be given the choice to decide as to who should sign the idemnity bond.

 

The body wants the personal guarantee to be collected either from the managing director of the corporate card holder in his personal capacity, director or the single dominant shareholder, and this choice should be given to the trading member.

The association has also suggested that in case the members exceed and introduce more than the above stipulated limit of Rs 25 lakh, then the stock exchange can immediately demand for an additional security on a case to case basis.

The letter adds that wherever the National Stock Exchange is collecting cash margin money on this account, it should permit by way of bank guarantee, fixed deposit receipts or valid share certificates held by the company or individual.

If the member remits the required fund by cash, he must receive an interest equivalent to any nationalised banks fixed deposit interest rate.

The association has also asked that the exchange should not give any exemption to any trading member, Indian or foreign.