As per Sebi norms, one of the conditions for voluntary surrender of recognition of a bourse is that the dues of the brokers to the market regulator should be cleared by the stock exchange in case the brokers fail to pay their dues.
In case such dues are not met with, the exchanges are liable to pay on behalf of the defaulting stock brokers. Currently, 10 bourses which have applied with Sebi for voluntary exit have R42 crore worth of pending dues by a total of 2,591 brokers.
The 10 bourses include Cochin Stock Exchange, Bangalore Stock Exchange, Ludhiana Stock Exchange, Madras Stock Exchange, Delhi Stock Exchange and Jaipur Stock Exchange.
After taking into account various issues, Sebi proposed that fee liabilities on the exchanges may be frozen, as on particular cut-off dates for brokers who had stopped trading many years back on the exchanges or whose cards had been auctioned subsequent to disciplinary action or who had been declared defaulter by exchanges. According to Sebi, the cut-off dates for freezing the calculation of fees and interest could be the 'last trading date' or the 'date of auction' of membership card or the 'date of declaration of default' of the broker, as the case may be.
Sebi said if any liability remains due on broker, it would be paid by the stock exchanges. However, if Sebi is convinced that it is difficult for the stock exchange to pay the liability at a given stage and the process of derecognition would be unduly delayed, the bourse may be allowed to exit subject to some conditions. Besides, the exchanges would have to ensure that names of defaulting brokers be posted on Sebi's website and that such entities would not authorised to trade in the markets till their dues are paid.