Section 38: Issue of a license to carry on stock exchange

(1) If an application is received pursuant to Section 37, the Board may, if it is satisfied with the following matters by making necessary inquiry into the matter, issue a license to carry on a stock exchange in such format as may be prescribed:

(a) Where it considers that the issue of the license to carry on a stock exchange would serve the interests of investors and the general public or the issuance of such a license is necessary for the proper
operation of the stock exchange,

(b) Where the applicant body corporate has fulfilled the matters referred to in sub-section (2).

(2) A body corporate which makes an application to the Board for a license to carry on a stock exchange pursuant to sub-section (1) shall set out the following matters in the application:

(a) Legal provisions of establishing the body corporate its memorandum of association stipulates that the body corporate has been established with the object of establishing and operating a sock exchange,

(b) The body corporate maintains its paid-up capital as prescribed by the Board that such capital is not less than fifty million rupees so long as the body corporate operates the stock exchange,

(c) There are sufficient grounds to the satisfaction of the Board that the body corporate can provide such infrastructures and facilities as may be required to operate the stock exchange,

(d) Matters relating to enlisting or making similar other provisions to recognise securities to be transacted through itself,

(e) Matters that the interests of investors would be protected through regular operation of transactions in securities through the provisions and systems to be adopted by the body corporate in relation to the exchange and transactions proposed by the body corporate for the operation of the stock exchange,

(f) That it has appropriate provisions on settlement of transactions in the stock exchange and publication of records thereof and statements of transactions,

(g) That complaints filed in relation to transactions carried on by its members can be examined in a proper manner,

(h) That action can be taken as mentioned in the By-laws in the event of failure of its members to fulfil the liabilities under the contract.