Description

BSE introduces revised formats and documentation requirements for submission of applications related to change in designated directors of corporate trading members.

Summary

BSE has issued revised formats for submission of applications related to change in designated directors of corporate trading members. The circular provides detailed documentation requirements, formats for board resolutions, and compliance checklists for resignation, appointment, or re-designation of designated directors. The process requires prior approval from the Exchange/Clearing Corporation before implementing changes.

Key Points

  • Minimum age requirement: Designated directors must be at least 21 years of age
  • Minimum experience requirement: At least 2 years of capital market experience as per Securities Contracts (Regulation) Rules, 1957
  • Minimum educational qualification: HSC or equivalent
  • Applications must be submitted in Stage-1 for prior approval before implementation
  • Multiple board resolution formats provided for different scenarios (resignation, appointment, re-designation)
  • Comprehensive KYC documentation required for incoming designated directors

Regulatory Changes

The circular introduces standardized formats and documentation requirements under the Securities Contracts (Regulation) Rules, 1957. Key regulatory aspects include:

  • Structured application process with specific document reference numbers (CDD-1 through CDD-7)
  • Mandatory Aadhaar consent format for address verification
  • Certified copies requirement by CA/CS for educational qualifications
  • Standard undertaking format for disclosure of regulatory issues
  • Specific capital market experience criteria across various financial entities

Compliance Requirements

For Corporate Trading Members:

  1. CDD-1: Submit application for change in designated director(s)
  2. CDD-2: Board resolutions as applicable (5 formats provided for different scenarios)
  3. CDD-3: Self-certified or authorized signatory certified PAN card copy
  4. CDD-4: Valid proof of address (Aadhaar with consent, Passport, Voter ID, utility bills, or bank statements not older than 2 months)
  5. CDD-5: Experience certificate on letterhead proving minimum 2 years capital market experience
  6. CDD-6: Educational qualification proof (minimum HSC), certified by CA/CS
  7. CDD-7: Standard undertaking with full disclosure

Acceptable Capital Market Experience:

  • Stock Broker, Sub-Broker, Authorised Person, Remiser
  • Asset Management Company, Mutual Fund
  • Merchant Banker
  • IOSCO affiliated foreign entity
  • Banking sector for currency derivatives or wholly owned subsidiaries
  • Authorised agent/clerk/representative of recognized stock exchange members

Important Dates

No specific implementation or deadline dates mentioned. The revised formats are effective from the date of circular issuance (October 15, 2025).

Impact Assessment

Operational Impact:

  • Corporate trading members must update their internal processes to align with revised documentation formats
  • Enhanced scrutiny of incoming designated directors’ qualifications and experience
  • Potential delays in director changes if documentation is incomplete or non-compliant

Compliance Impact:

  • Stricter KYC norms with Aadhaar consent requirements
  • More rigorous verification of educational qualifications and experience certificates
  • Standardized board resolution formats reduce ambiguity in approval process

Market Impact:

  • Improves governance standards for trading member firms
  • Ensures qualified individuals with relevant experience serve as designated directors
  • Enhances investor protection through better oversight of member organizations

Impact Justification

Procedural update affecting corporate trading members seeking to change designated directors. Requires updated documentation and compliance with revised formats.