AUDIT OF MEMBERS OF STOCK EXCHANGE

AUDIT OF MEMBERS OF STOCK EXCHANGE
Business at Stock Exchange can be transacted only by its members. They enter into transaction either on their own behalf or their clients or sub-brokers. Every active member is required to get his accounts audited by a Chartered Accountant. A Company can also become a Member of Stock Exchange.
Matters to be considered by the SEBI while granting registration to a prospective stockbroker:
1. Is eligible to be admitted.
2. Has necessary infrastructure.
3. Has past experience in business of securities.
4. Is not subjected to in disciplinary proceedings by Stock Exchange.
• The SEBI may levy monetary fine and penalties on any person in following cases:
(i) Failure to furnish document/information etc required by the Board (SEBI).
(ii) Failure to maintain books of accounts/returns.
(iii) Failure by sponsor of any collective investment scheme including Mutual Fund to obtain registration certificate, to comply with terms of such certificate, to dispatch unit certificate, to refund application money, to invest money in desired manner and in specified securities.
(iv) Failure to issue contract notes in form required, to deliver security, make payment to client, charging excess brokerage.
(v) Failure to enter into agreement with client.
(vi) Person dealing/communicating on basis of price sensitive information.
(vii) Failure to disclose aggregate of shareholding in body corporate before acquiring further share and to make public announcement to acquire share at minimum price in case of takeovers.