New Delhi, Aug 18: A bill to restrict voting rights of brokers as shareholders and their participation on governing boards of stock exchanges was today passed in Lok Sabha without discussion and by a voice vote. Incorporating the recommendations of JPC report on stock scam, the Securities Laws (Amendment) Bill, 2003, introduced by Finance Minister Jaswant Singh, seeks to expedite corporatisation and demutualisation of exchanges. Since the demutualisation separates ownership, voting rights and management from the right of access to trading, it requires that the representation of brokers in board of directors of stock exchanges is either not permitted at all or kept to a minimum, says the statement of objects and reasons of the bill.
The bill also proposes to amend the Depositories Act, 1996, to provide for appeals from the orders of the Securities Appellate Tribunal under that act, to the Supreme Court on the lines of the Securities and Exchange Board of India Act, 1992. The bill, besides defining the corporatisation and demutualisaton, also seeks to limit the organisational form of a stock exchange to a corporate entity.
It also proposes specifying the time limit within which the shares shall be disinvested by stock brokers under the scheme of corporatisation and demutualisation. Bureau Report