SC issues notice to SEBI on fee continuity benefit issue

SC issues notice to SEBI on fee continuity benefit issue The Supreme Court sought reply from market regulator SEBI on a petition filed by a stock broker seeking fee continuity benefit for fresh registration of membership inherited by the firm. A bench headed by Justice Altamas Kabir while issuing notice, asked DG Goenka Equities to give a bank guarantee of Rs 33 lakhs from a nationalise bank within two weeks. Senior counsel Indu Malhotra, appearing for the stock broker, said that it had already paid around Rs 7 lakh as registration fee and SEBI had raised a further demand of more than Rs 30 lakh for 2000-2005 treating the stock broker as a new member. The appeal sought setting aside of the Securities Appellate Tribunal's judgement that held the fee continuity benefit was admissible only in case of conversion of an individual or partnership card into a corporate entity and not when the erstwhile member expired before the corporate entity was formed. Sating that the tribunal had erred in rejecting its plea, the company said when the fee continuity benefit had been extended to legal heirs in cases where erstwhile individual or partnership members expired after conversion but before completing 3 years, then the same benefit should be given to legal heirs of individuals who expired prior to conversion. According to D G Goenka Equities, it was incorporated by the legal heirs of the deceased member of the Board and was entitled to the fee continuity benefit. While stating that there was no new membership contemplated by BSE, the statutory rules and regulations framed under the Act as well as the byelaws did not require payment of fresh registration fees on the occurrence of such a transmission.

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