ELIGIBILITY OF MEMBERS

The salient features relating to the eligibility criteria for the two trading segments of the NSE are :

Wholesale Debt Market :

The persons eligible to become Trading Members are corporate bodies, companies, institutions, including subsidiaries of banks engaged in financial services and such other persons or entities as may be permitted from time to time by RBI/SEBI
The whole-time directors should possess at least two years' experience in any activity related to banking or financial services or treasury
The applicant must possess a minimum networth of Rs.2 crores
The applicant must be engaged solely in the business of securities and must not be engaged in any fund based activities.

Capital Market Segment :

Individuals, registered firms, corporate bodies, companies and such other persons may be permitted under the SCRA,1957
The applicant must be engaged solely in the business of securities and must not be engaged in any fund based activities
The minimum networth requirements prescribed are as follows:
a) Individuals and registered firms : Rs. 75 lakh
b) Corporate bodies : Rs.100 lakh
In case of registered partnership firm, each partner should contribute atleast 5% of the minimum networth requirement of the firm.
A corporate trading member should consist only of individuals (maximum 4) who should directly hold atleast 40% of the paid-up capital in case of listed companies and atleast 51% in case of other companies.
The minimum prescribed qualification of graduation and two years experience of handling securities as broker, sub-broker, authorised assistant etc. must be fulfilled by:
a) Minimum two directors in case the applicant is a corporate,
b) Minimum two partners in case of partnership firms and
c) The individual in case of individual or sole proprietary concerns.

The two experienced director in a corporate applicant / trading member should hold minimum 5% of the paid up capital of the company.

Surrender of Trading Membership:

Trading members can apply for surrender of their trading membership once admitted on the Exchange. Segmental surrender will not be permitted i.e. a trading member who is admitted to both the wholesale debt market and the capital market segments cannot seek surrender from just one segment. Surrender of trading membership can be permitted by the Exchange after fulfilling certain conditions by the trading member such as, clearing off all the dues to the Exchange and National Securities Clearing Corporation, notifying all other trading members of the approval of surrender, issuance of an advertisement in leading dailies etc.

The security deposit of the surrendering trading member may be subject to a certain minimum lock in period from the date of last trade or date of approval of surrender, whichever is later. Trading Members also have an option to substitute the security deposit with bank guarantee for the said period.

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