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Securities Law Flashcards

1
Q

Regulatory Fee of Stock Exchange and Clearing Corporation

A

Based on Annual Turnover

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2
Q

What is annual turnover ?

A

Aggregate value of transactions in a financial year excluding agricultural commodity derivatives

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3
Q

When should regulatory fee be paid paid

A

Within 30 days of the conclusion of the relevant financial period. The amount is specified in Part A Schedule III.

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4
Q

Flat regulatory fee on transactions on agricultural commodity derivatives.

A

One lakh

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5
Q

When should listing fee be paid ?

A

15 days from the end of each quarter of a financial year

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6
Q

Listing fee to be paid within 15 days from the end of each quarter of a financial year.

A

10 percent of aggregate listing fees

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7
Q

Listing fees of last quarter to be paid within?

A

30 days of end of the last quarter together with regulatory fee of that year

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8
Q

Code of conduct of Recognized Stock Exchange and Recognized Clearing corporation?

A

Part A Schedule II

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9
Q

Period of recognition granted to a clearing corporation unless granted on a permanent basis shall be ?

A

Not less than one year

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10
Q

Repo Transaction means ?

A

Transaction in repo and reverse repo in the debt securities that are dealt and traded on a recognized stock exchange

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11
Q

Application for Recognition as a stock exchange

A

Form A
Rules 3 of the rules

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12
Q

Application for recognition as a clearing corporation

A

Form A
Schedule I of the regulations

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13
Q

Fee for recognition

A

Rule 4 of the rules ( SCRA RULES 1957)

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14
Q

Application for recognition has to be accompanied with ?

A
  1. MOA
  2. AOA
  3. Bye-laws
  4. Other documents - Rule 5 of the rules , section 3 & 4 of the Act and the regulations
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15
Q

Manner of application for grant of recognition ?

A

Form D Schedule II

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16
Q

Period of recognition granted to a stock exchange shall be as per ?

A

Rule 6 of the rules

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17
Q

Regulatory fee of recognized clearing corporation shall be ?

A

Board may specify

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18
Q

interest on delay in paying listing fee and regulatory fee ?

A

15 % per annum for each month of delay

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19
Q

Renewal of recognition of stock exchange

A
  1. Same provisions as grant of recognition
  2. Rule 7 of the rules
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20
Q

Renewal of recognition by clearing corporation ?

A

Same as recognition - Form A Schedule I

3 months prior to date of expiry of recognition

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21
Q

Minimum net worth of recognized stovk exchange ?

A

100 crores at all times

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22
Q

Minimum net worth of clearing corporation

A

100 crore

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23
Q

Every recognized clearing corporation shall maintain capital

A
  1. On the commencement of operations
  2. Ongoing Basis
  3. Including Retained earnings and Reserves
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24
Q

Capital has to adequately cover ?

A
  1. Counterparty credit risk
  2. Business Risk
  3. Legal Risk
  4. Operational Risk
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25
Q

Recognized clearing corporation shall hold additional capital to cover costs required for ?

A
  1. Orderly wind down, or
  2. Recovery of Operations
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26
Q

RSE and RCC shall not distribute profits to its shareholders until?

A

Networth is achieved

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27
Q

Submission of audited networth certificate

A
  1. From Statutory Auditor
  2. Yearly basis
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28
Q

The onus to ensure that all shareholders are fit and proper persons shall be on?

A

Recognized Stock Exchange or Recognized Clearing Corporation

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29
Q

The onus of fit and proper is not applicable in the case of ?

A

Person holding less than 2 percent equity shares/ voting rights

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30
Q

When should a fit and proper criteria declaration be given ?

A

15 days from end of financial year

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31
Q

Purpose of monitoring mechanism is ?

A

Ensure compliance with shareholding conditions at all times .

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32
Q

RSE and RCC have to ensure that all its _ are fit and proper persons at all times ?

A
  1. Directors
  2. KMP
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33
Q

Fit and Proper person means ?

A

General Reputation , Fairness and Integrity including but not limited to:
1. Financial Integrity
2. Good reputation and Character
3. Honesty

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34
Q

RSE and RCC shall disclose to the Board their shareholding pattern

A

Quarterly- 15 days from the end of each quarter.

  1. 10 largest shareholders- Number and percentage of shares held by them
  2. Shareholders falling under regulation 17 and 18 who have acquired shares in that quarter.
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35
Q

Representative of issuer of debt securities on the governing board of recognized LPCC may be appointed

A
  1. Rotational basis
  2. Deemed to be a Nominee Director
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36
Q

The representative of the issuer of debt securities shall be ?

A
  1. One of the top three issuers which are PSU
  2. Based on Issue Size in the previous FY
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37
Q

For the first five years from date of grant of recognition by Board to LPCC

A
  1. No distribution of dividend to Board
  2. All profits will be transferred to fund under Regulation 37
38
Q

LPCC shall not carry on any activity whether involving deploying of funds or otherwise

A

Without prior approval of Board

39
Q

Prior approval not required in case of ?

A
  1. treasury investments
  2. as per investment policy
  3. approved by governing board of LPCC
40
Q

Dispute Resolution Mechanism of LPCC

A
  1. For disputes arising out of transactions cleared and settled by it
41
Q

Who will lay down manner in which LPCC shall establish a dispute resolution mechanism ?

A

Board in consultation with RBI

42
Q

LPCC has to ensure compliance with the provisions of

A
  1. Securities Contracts (Regulation) ( Stock Exchange and Clearing Corporations) Regulations , 2018
  2. Directions issued by RBI
43
Q

In case of RSE and RCC, the managing director shall be included in the category of?

A

Non -Independent Director

44
Q

In case of LPCC, Managing Director will ?

A

NOT BE INCLUDED in the category of NID

45
Q

An employee of RSE and RCC may be appointed to the governing Board

A
  1. In addition to managing director
  2. Deemed to be non-independent director
46
Q

Not a deemed trading member or clearing member ?

A

Independent Directors of Associates of PFI/ Bank in public sector who are clearing member/trading member

47
Q

Governing Board of RSE/RCC shall comprise of Directors

A
  1. Finance and Accountancy
  2. Capital markets
  3. Legal and Regulatory Practice
  4. management and administration
  5. Technology
  6. Risk Management
48
Q

PID shall keep its governing board apprised of any conflict of interest which many arise because of him providing services to?

A

1.Any Company
2. Trading Member
3. Clearing Member
4. Associates /Agent

49
Q

Term of PID

A

3 years extendable by another term of 3 years

50
Q

Term of MD

A

5 years for a maximum period of 10 years, subject to age 65

51
Q

Removal of MD

A
  1. By Board Suo Motu- interest of securities market
  2. Governing Body of RSE and RCC with prior approval of Board
52
Q

Nomination and Remuneration Committee of Board

A
  1. Majority of PID
  2. Chaired by PID
53
Q

Compensation policy of made by NRC

A

Part I, Schedule II

54
Q

tenure of KMP (Other than a director) of RSE/RCC shall be fixed by

A

NRC- which will be for a fixed period

55
Q

Tenure means

A

Period of posting in a regulatory department which shall be for a fixed period.

56
Q

Statutory Committees of RSE/RCC

A
  1. Functional Committee
  2. Over sight Committee
  3. Investment Committee
57
Q

Every RSE/RCC shall have a ?

A

Grievance Redressal Panel

58
Q

Compliance Officer shall report to the Board

A
  1. Immediately and Independently
  2. Quarterly Basis
59
Q

Chief Risk Officer to report to Board

A

Half yearly Basis

60
Q

Penalties Levied by RSE/RCC shall be credited to ?

A
  1. IPF
  2. Fund under 37-SGF
61
Q

Compliance to Disclosure Requirements and Corporate Governance Norms

A

Half yearly Basis

62
Q

An employee of a recognized stock exchange or recognized clearing corporation shall not simultaneously be an employee of ?

A

Any other company where the recognized stock exchange or recognized clearing has invested.

63
Q

Who will not receive any 1. Compensation or 2. Financial Benefit from companies where recognized stock exchange or recognized clearing corporation has invested.

A

D E CM

Director, Employee, Committee Member

64
Q

RCC shall lay down a policy framework for ensuring that there is no discrimination in settlement of trades executed on?

A
  1. Shareholder Stock Exchanges and
  2. Non Shareholder Stock Exchanges
65
Q

Every RSE and RCC shall ensure EUTF access to all persons without bias towards?

A

Associate and Related Entities (AR)

65
Q

Who will lay down framework for sharing and monitoring of data ?

A
  1. RSE
    2.RCC
  2. Company where RSE and RCC has invested
66
Q

Which books of accounts and documents have to be maintained by recognized stock exchange for 8 years?

A
  1. Minutes books of meetings of -
    A. MEMBERS
    B. GOVERNING BODY
    C. STANDING COMMITTEE of GOVERNING BODY
    D. REGISTER OF MEMBERS with full names and addresses
    E. REGISTER OF AUTHORIZED CLERKS
    F. REGISTER OF REMISIERS OF AUTHORIZED ASSISTANTS
    G. RECORD OF SECURITY DEPOSITS
    H. MARGIN DEPOSIT BOOKS
    I. LEDGERS
    J. JOURNALS
    K. CASH BOOK
    L. BANK PASS BOOK
67
Q

RSE and RCC shall furnish its annual financial statements and returns to Board as per ?

A

Rule 17 and 17 A of the rules

68
Q

RSE and RCC shall make bye laws with prior approval of Board for ?

A
  1. Regulation of Contracts
  2. Clearing and Settlement
69
Q

Which documents cannot be amended except with prior permission of the Board ?

A
  1. MOA
  2. AOA
  3. Other constitution document so far they relate to matter specified in Section 3 of the SCRA Act or Regulations
  4. Bye-laws of RSE and RCC
70
Q

The Bye-laws and amendments to Articles, Rules, Bye-laws shall be in the manner specified in ?

A

PART E Schedule II ….. BYEEEEEEEEEEEEE

71
Q

The Payment and Settlement in respect of a transaction in a RSE and RCC shall be determined in accordance with the _ procedure?

A
  1. Netting
  2. Gross Procedure
72
Q

Payment and Settlement in respect of a transaction shall be ?

A

Final, Irrevocable and Binding … FIB

73
Q

Settlement is final and irrevocable as soon as ?

A

Money, Securities, other transactions payable IS DETERMINED- whether or not actually paid.

74
Q

Every RCC providing clearing and settlement services for commodity derivatives shall ensure ?

A

Guarantee for the settlement of Trades INCLUDING Good Delivery

75
Q

Good Delivery means ?

A
  1. Delivery in proper form
  2. To transfer title
  3. Is of the quality and quantity as per contract specifications of concerned exchange
76
Q

RCC has the right to recover dues from its clearing members after the discharge of its clearing and settlement functions from?

A
  1. Collaterals,
  2. Deposits
  3. Assets

of clearing members .

77
Q

Every clearing corporation shall devise and maintain a framework for ORDERLY WIND DOWN of its?

A

Critical operations and services covering both voluntary and involuntary scenarios.

78
Q

Framework for Orderly Wind -Down shall ensure ?

A
  1. Timely and orderly settlement , cessation, transfer of position
  2. Transfer of Collaterals, Deposit, Margin, Asset of members to another clearing corporation
  3. Related matter
79
Q

A recognized stock exchange can apply for listing of its securities on any other stock exchange other than ?

A
  1. Itself
  2. Associated Stock Exchange
80
Q

Conditions for a Recognized Stock Exchange to list its own securities are ?

A
  1. Compliance with the provisions of Ownership and Governance
  2. Three Years of continuous trading immediately preceding date of application of listing
  3. Approval of Board
81
Q

A recognized stock exchange shall not list ?

A

Any securities of its associates

82
Q

The securities of a recognized clearing corporation shall not be listed on any ?

A

Stock Exchange

83
Q

Board may call for any information, document , records from ?

A
  1. Recognized stock exchange
  2. Recognized Clearing Corporation
  3. Their Governing Board
  4. Any Shareholder
84
Q

Board may undertake inspection , inquiries, audit of?

A
  1. Any recognized stock exchange
  2. Recognized clearing corporation
  3. Any Associate
  4. Any Shareholder
  5. Associate/Agent of Shareholder
85
Q

Under Stock Exchange Regulations, Board has the power to issue directions like ?

A
  1. Directing a Person holding equity shares or rights over equity shares to divest his holding
  2. Direct transfer of proceeds or securities to the IPF or SGF
  3. Debarring any stock exchange or clearing corporation , shareholder, associate of shareholder , transferee of shares from accessing securities market or dealing in securities
86
Q

Under Stock Exchange Regulations, the board can also take action against recognized stock exchange, RCC, director, committee member, KMP, employee like?

A
  1. Debarring from introducing new products and services
  2. Restricting its existing activities , products and services
  3. Imposing Monetary Penalty
  4. Restricting any person from attending meetings or participating in functioning of RSE/RCC
87
Q

Before taking any action, Board shall have due regard to?

A
  1. Mala fide intent
  2. Omission/ Commission
  3. Negligence
  4. Repeated instances of genuine decision making that went wrong
88
Q

Networth of clearing corporation means ?

A

Aggregate value of its liquid assets

89
Q

Networth of stock exchange means ?

A

Aggregate value of Paid up equity share capital plus free reserves excluding:

  1. Statutory funds
  2. Benefit Funds
  3. Reserves created out of revaluation
90
Q
A
91
Q
A

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