Membership continuing Compliance

Member Nomenclature
Members are not allowed to have the following words as part of their (trade) name
  • Commex / Comdex
  • Share(s) / Stock(s) / Security(ies)


Shareholding Pattern and DPG
Every Member of the Exchange which is an unlisted company (other than subsidiary / joint venture of a listed company/ financial institution/bank)  or a partnership firm /limited liability partnership (LLP), is required to submit the details pertaining to its shareholding/ sharing pattern, as the case may be, as per the prescribed format of the Exchange. Such details need to be submitted at the time of applying for membership as well as on an annual basis as part of Annual Returns. Further, a Member should identify a Dominant Promoter Group (DPG) from among its shareholders/partners. Details of such DPG are also required to be submitted to the Exchange at the time of applying for membership as well as on an annual basis as part of Annual Returns.

In case the Applicant Member is an unlisted company (other than subsidiary / joint venture of a listed company/financial institution/bank) or a partnership firm /limited liability partnership, the Applicant Member shall have to identify a Dominant Promoter Group at the time of making the application. The Dominant Promoter Group shall consist only of individuals, not more than four in number who collectively shall directly or indirectly hold not less than 51% of the paid-up equity capital or the sharing ratio of the applicant company or the partnership firm/LLP.

For arriving at the shareholding of persons constituting the Dominant Promoter Group, the shareholding of his/their close relatives, viz. parents, spouse, children and their descendants, brothers and sisters (specified relatives) only may be counted; provided an irrevocable and unconditional undertaking in writing is submitted to the Exchange in the prescribed format in respect of such shareholding.

Indirect shareholding shall be calculated proportionately by reckoning the direct shareholding of the persons constituting Dominant Promoter Group along with the support of their specified relatives in the corporate shareholder of the applicant Company, provided an irrevocable and unconditional undertaking by the applicant company in writing is submitted to the Exchange in the prescribed format.

The partnership firms/limited liability partnerships shall also identify a Dominant Partner Group consisting of not more than four individuals who collectively shall always have more than 51% share in the profits & losses/sharing ratio of the firm/LLP. The firm/LLP shall also comply with the above requirements for change in the Dominant Partner Group. The Dominant Partners can also include, as per the guidelines given earlier/above and subject to an unconditional undertaking as per prescribed format, the share of their close/specified relatives.

Any change in the Dominant Promoter Group would require the Member of UCX to seek fresh/prior approval of UCX for continuation of membership and to pay approval fee and/or additional deposits to UCX and also abide by such conditions as UCX may stipulate while granting such approval.

Any change in the shareholding/sharing pattern of the company / partnership firm/ limited liability partnership including that of the said Dominant Promoter Group or their shareholding interest shall be effected only with the prior written permission of UCX. However, no prior approval for change in shareholding (for bodies corporate) or sharing pattern (for partnership firms/ limited liability partnerships) will be required if such change:
  1. does not alter the shareholding/share of Dominant Promoter Group (DPG) constituents in percentage terms,
  2. does not lead to addition or deletion of a Dominant Promoter Group (DPG) constituent(s), and
  3. does not result in change of management/ control.

Note: The interpretation of the Exchange as to whether a change in shareholding/sharing pattern carried out by a member was in conformity with the 3 conditions viz. a, b, c above will be final and binding on the member.

But any change in the shareholding/sharing pattern of the company / partnership firm/ limited liability partnership, carried out pursuant to prior/fresh approval of UCX or as per the terms stipulated in the previous paragraph, will be required to be reported to the Exchange in the desired/prescribed formats within 21 days of such change having been carried out.

In case where none of the dominant promoters is on the Board of Directors of the applicant company / corporate entity, then at least two directors, each of whom are holding a minimum of 5% of the paid up equity capital of the applicant, should be on the Board of Directors of the applicant company/corporate entity.

Net worth Stipulation
The Exchange has prescribed minimum net worth which every Member must possess. Such net worth is required to be possessed at the time of making application for membership and it must be maintained on a continuous basis during the entire tenure of the membership of the Exchange. Certificate of net worth, as prescribed by the Exchange, must be submitted at the time of applying for membership as well as on an annual basis as a part of Annual Returns. Further, the net worth should be calculated only as per the method prescribed by the Exchange and should be certified by an independent Chartered Accountant, who is not a  relative of/related to the Member or its Group entities or its proprietor/ partner(s)/ director(s)/ governing body members(s). The Exchange reserves the right and sole discretion to change/increase/modify the minimum Net Worth stipulation from time to time and the members will be required to comply with the same.

The Net Worth prescribed by the Exchange is as under:

  1. Trading Membership                                :     Rs    10.00 Lacs
  2. Trading cum Clearing Membership           :     Rs     25.00 Lacs
  3. Professional Clearing Membership            :     Rs 1000.00 Lacs

Note : The capital adequacy and net worth criteria prescribed by the Commodity Futures Exchanges and Commodity Spot Exchanges will have to be met separately by the Members.
The Exchange has prescribed two methods for computation of net worth

                       
Method 1 Net Worth to be calculated as :     
  • Paid up Capital      
  • Add : Reserve & Surplus (excluding revaluation reserves)
  • Less: Accumulated losses
  • Less: Miscellaneous Expenditure
  • = Net Worth
Method 2

Net Worth to be calculated as Summation of the following:-

  • Net value of listed, Quoted Investments after 30% haircut
  • Net value of unlisted Investments after 50% haircut
  • Other Investments like PPF, NSC, Statutory deposits with UCX,Deposits with registered NBFCs, Bank FDs
  • Market Value of Land & Building component of  the Fixed Assets after 50% haircut
  • Debtors not exceeding 3 months + Cash & Bank balance
  • The above net worth is reduced by Current and Long term Liabilities

Members may choose any one method, which should    then be continued to be followed. unless a change of    method is specifically approved by Exchange.