Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018

The Securities and Exchange Board of India has issued the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018. No person shall conduct, organize or assist in organizing any stock exchange or clearing corporation unless he has obtained recognition from the Board in accordance with the Act, rules and these regulations. An applicant seeking recognition as a stock exchange shall, comply with the following conditions, namely:

  1. The applicant has the necessary infrastructure for the orderly execution of trades;
  2. The applicant has an online screen-based trading system;
  3. The applicant has an online surveillance capability which monitors positions, prices and volumes in real time so as to ensure market integrity;
  4. The applicant has adequate infrastructure to list securities for trading on its platform, wherever applicable;
  5. The applicant has necessary capability to have a nationwide network of trading members and has adequate facility to admit and regulate its members;
  6. The applicant has made necessary arrangements to establish connectivity with its trading members and clearing corporation;
  7. The applicant has adequate Investor Protection Fund and Investor Services Fund;
  8. The applicant has adequate investor grievances redressal mechanism and arbitration mechanism to resolve disputes arising out of trades and its settlement;
  9. The applicant has the facility to disseminate information about trades, quantities and quotes in real time to at least two information vending networks which are accessible to investors in the country
  10. The applicant has adequate systems’ capacity supported by a business continuity plan including a disaster recovery site;
  11. The applicant has in its employment, sufficient number of persons having adequate professional and other relevant experience;
  12. The business feasibility plan has been appraised by a reputed agency having expertise in securities market; and
  13. Any other conditions as may be specified by the Board.