INDIA BUSINESS WORLD - DECEMBER 1st - DECEMBER 15th
- 2007
APEX COURT TO TEST BROKER NORMS
The Supreme Court has decided to examine if the amended rule relating to computation of turnover of a stock broker for the purpose of levy of fee could be given retrospective effect. The Securities Appellate Tribunal had said that paragraph 1(bb) in Scheduled III of the Regulation providing for concessional rate of jobbing turnover and other similar benefits to the stockbrokers cannot be claimed for the transactions prior to 2002.
The SAT decision has been challenged in the apex court by a corporate member of NSE. A SC bench comprising Justice CK Thakker and Justice Altamas Kabir sought explanation from Sebi on the plea seeking retrospective implementation of the amended rule.
Advocate Mohit Paul opposed the plea on behalf of Sebi said that the market regulator was justified in denying the benefits claimed by the appellant. Mr Paul accepted a notice on behalf of Sebi. The court also issued notice to NSE.
Former attorney general Soli Sorabjee, who appeared on behalf of appellant Picses Industrial, said: "The provisions of sub clause (bb) to clause para 1 in Scheduled III of the Regulation as amended in 2002 is clarificatory and declaratory in nature and has retrospective effect."
The amended rule provides that in respect of jobbing transactions which are squared off during the same day and which have not been undertaken by the broker on behalf of the clients, the fee shall be computed at the rate of one-hundredth of 1% in respect of the sale side of such transaction. This is nothing but a statutory regularisation with retrospective effect, said the appeal.
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