Recognition

The stock exchanges are to be recognized by the Government. For getting recognition, an application under the Section 3 of the Securities Contracts (Regulation) Act has to be submitted to the Government with a fee of Rs. 500. The application should be accompanied by four copies of rules and by-laws. If the stock exchange is an incorporated body, the application should be accompanied by the Memorandum and Articles of Association. The Government may make enquiries further information to be furnished relating to the application. Application for renewal should be made 3 months before expiry along with a fee of Rs. 200.
The stock exchange is granted recognition only if the Government is satisfied that, (a) its rules and by-laws conform to the conditions prescribed for ensuring fair dealings and protection to investors; (b) it would be in the interest of the trade and the public.
Of the 24 stock exchanges in India, 13 are public limited companies, eight are limited by guarantee and three are voluntary non-profit-making associations. Only eight exchanges-Bombay, Calcutta, Madras, Ahmedabad, Delhi, Hyderabad, Indore and Bangalore-have been given permanent recognition, others have to renew it every year.