8. Qualifications.- The rules relating to admission of members of a stock exchange seeking recognition shall inter alia provide that: (1) No person shall be eligible to be elected as a member if - (a) he is less than twenty-one years of age; (b) he is not a citizen of India: Provided that the governing body may in suitable cases relax this condition with the prior approval of the Central Government; (c) he has been adjudged bankrupt or a receiving order in bankruptcy has been made against him or he has been proved to be insolvent even though he has obtained his final discharge; (d) he has compounded with his creditors unless he has paid sixteen annas in the rupee; (e) he has been convicted of an offence involving fraud or dishonesty; (f) he is engaged as principal or employee in any business other than that of securities except as a broker or agent not involving any personal financial liability unless he undertakes on admission to severe his connection with such business: Provided that the Central Government may, for reasons sufficient in the opinion of the said government, permit a recognised stock exchange to suspend the enforcement of this clause for a specified period on condition that the applicant is not associated with or is a member of or subscriber to or shareholder or debenture holder in or connected through a partner or employee with any other organisation, institution, association, company or corporation in India where forward business of any kind whether in goods or commodities or otherwise is carried on or is not engaged as a principal or employee in any such business; (g) Omitted (h) he has been at any time expelled or declared a defaulter by any other stock exchange; (i) he has been previously refused admission to membership unless a period of one year has elapsed since the date of such rejection. (2) No person eligible for admission as a member under sub- rule (1) shall be admitted as a member unless: (a) he has worked for not less than two years as a partner with, or as an authorised assistant or authorised clerk or remisier or apprentice to, a member; or (b) he agrees to work for a minimum period of two years as a partner or representative member with another member and to enter into bargains on the floor of the stock exchange and not in his own name but in the name of such other member; or (c) he succeeds to the established business of a deceased or retiring member who is his father, uncle, brother or any other person who is, in the opinion of the governing body, a close relative: Provided that the rules of the stock exchange may authorise the governing body to waive compliance with any of the foregoing conditions if the person seeking admission is in respect of means, position, integrity, knowledge and experience of business in securities, considered by the governing body to be otherwise qualified for membership. (3) No person who is a member at the time of application for recognition or subsequently admitted as a member shall continue as such if - (a) he ceases to be a citizen of India: Provided that nothing herein shall affect those who are not citizens of India but who were members at the time of such application or were admitted subsequently under the provisions of clause (b) of sub-rule (1) of this rule, subject to their complying with all other requirements of this rule; (b) he is adjudged bankrupt or a receiving order in bankruptcy is made against him or he is proved to be insolvent; (c) he is convicted of an offence involving fraud or dishonesty; (d) Omitted (e) Omitted (f) he engages either as principal or employee in any business other than that of securities except as a broker or agent not involving any personal financial liability, Provided that - (i) the governing body may, for reasons, to be recorded in writing, permit a member to engage himself as principal or employee in any such business, if the member in question ceases to carry on business on the stock exchange either as an individual or as a partner in a firm, (ii) in the case of those members who were under the rules in force at the time of such application permitted to engage in any such business and were actually so engaged on the date of such application, a period of three years from the date of the grant of recognition shall be allowed for severing their connection with any such business, (iii) nothing herein shall affect members of a recognised stock exchange, permitted under the proviso to clause (f) of sub-rule (1) to suspend the enforcement of the aforesaid clause, for so long as such suspension is effective, except that no member of such exchange shall engage in forward business of any kind whether in goods or commodities or otherwise and, if actually so engaged on the date of such application, he shall severe his connection with any such business within a period of three years from the date of the grant of recognition. (4) A company as defined in the Companies Act, 1956 (1 of 1956), shall be eligible to be elected as a member of a stock exchange if- (i) such company is formed in compliance with the provisions of section 322 of the said Act, (ii) a majority of the directors of such company are shareholders of such company and also members of that stock exchange; and (iii) the directors of such company, who are members of that stock exchange, have ultimate liability in such company: Provided that where the Central Government makes a recommendation in this regard, the governing body of a stock exchange shall, in relaxation of the requirements of this clause, admit as member the following corporations, companies or institutions, namely- (a) the Industrial Finance Corporation, established under the Industrial Finance Corporation Act, 1948 (15 of 1948); (b) the Industrial Development Bank of India, established under the Industrial Development Bank Act, 1964 (18 of 1964); (c) the Life Insurance Corporation of India, established under the Life Insurance Corporation Act, 1956 (31 of 1956); (d) the General Insurance Corporation of India constituted under the General Insurance Corporation (Nationalisation) Act, 1972 (57 of 1972); (e) the Unit Trust of India, established under the Unit Trust of India Act, 1963 (52 of 1963); (f) the Industrial Credit and Investment Corporation of India, a company registered under the Companies Act, 1956 (1 of 1956); (g) the subsidiaries of any of the corporations or companies specified in (a) to (f) and any subsidiary of the State Bank of India or any nationalised bank set up for providing merchant banking services, buying and selling securities and other similar activities. (4A) A company as defined in the Companies Act, 1956 (1 of 1956), shall also be eligible to be elected as a member of a Stock Exchange if- (i) such company is formed in compliance with the provisions of section 12 of the said Act; (ii) such company undertakes to comply with such financial requirements and norms as may be specified by the Securities and Exchange Board of India for the registration of such company under sub-section (1) of section 12 of the Securities and Exchange Board of India Act, 1992(15 of 1992); (iv) the directors of the company are not disqualified for being members of a stock exchange under clause (1) except sub-clause (b) and sub-clause (f) thereof or clause (3) except sub-clause (a) and sub-clause (f) thereof and the Director of the company had not held the offices of the Director in any company which had been a member of the stock exchange and had been declared defaulter or expelled by the stock exchange; and (v) not less than two directors of the company are persons who possess a minimum two years' experience- (a) in dealing in securities; or (b) as portfolio managers; or (c) as investment consultants. (5) Where any member of a stock exchange is a firm, the provisions of sub-rules (1), (3) and (4), shall, so far as they can, apply to the admission or continuation of any partner in such firm. | 