NSE takes tough stand on MAPIN registration

The National Stock Exchange (NSE) has taken a tough stand regarding brokers complying with the market regulator's requirements as regards registration with the market participants and investors (MAPIN) database, and has told its members that they should not allow their sub brokers to trade if the latter have not registered in the database.

The NSE's tough note, sent out on January 7, effectively asks brokers to disconnect defaulting sub-broker terminals.

But brokers have not taken kindly to the NSE's one-week ultimatum. Deena Mehta, managing director at Asit C Mehta Investment Intermediates said, "It is virtually impossible to meet the deadline because of the limited time available for registration for such entities."

In a circular dated January 7, 2005, the NSE had asked its trading members to confirm compliance as regards their sub-brokers' registration in the database. National Stock Exchange officials were unavailable for comment.

Mehta said the MAPIN facility is not directly available in 'B' and 'C' towns, making it very difficult to meet the deadline.

Mehta explained that Sebi had started registering sub-broker only in December 2004, after having put registrations for hold between September 2003 and September 2004 since the model agreement was not available.

This agreement was notified only in August 2004.

Brokers will have to submit a compliance certificate to the NSE within a week confirming they have disassociated themselves with all sub-brokers who have not obtained the MAPIN unique identification numbers (UINs).

Market sources said that they may be required to also submit a certificate at a later date furnishing the UIN of the related persons of the sub brokers associated with them.