No person shall act or perform the functions of a futures broker unless such person is licensed as a futures broker with the Commission. Any person who is performing functions of a futures broker and having valid broker registration under the Commodities Exchange and Futures Contract Rules, 2005 shall be deemed licensed to act as futures broker for a period of one year.
A company may apply to the Commission for licence as a futures broker if is not a single member company. The applicant holds a valid TRE Certificate issued in its name and applicant identifies names and details of its sponsors which shall be required to collectively hold and retain not less than fifty one per cent of the share capital of the applicant, and in the case of a listed company, not less than twenty five per cent of the share capital of applicant provided that any change in sponsors shall not be affected without prior written approval of the Commission.
It is also mandatory that the applicant and its sponsors do not have controlling interest in any other company holding licence as a futures broker and e applicant, its sponsors, directors and senior management officers are fit and proper persons as per the criteria specified.
A company may apply to the Commission for licence as a futures broker if the chief executive of the company does not hold any office in any other company and Director or employee of the company holding licence as a futures broker does not hold the position of a Director or any other position in any other company licensed as a futures broker.
A company may apply to the Commission for licence as a futures broker if its sponsors have and will continue to have representation of at least twenty per cent on its board of directors; its sponsors have submitted verifiable documents including wealth statements submitted with the tax authorities to demonstrate that its net-worth is not less than twice the amount to be subscribed by him personally. Provided that in case of a company, its sponsors have submitted verifiable documents to demonstrate that they have financial resources not less than twice the amount of the paid-up capital requirement for futures broker.
It is also compulsory for the broker that it meets the financial resource requirements specified in these regulations and has and shall continue to have the requisite number of personnel or employees having mandatory certification as specified by the Commission from time to time and its ultimate beneficial owners have not been convicted in any predicate offences provided under Anti-Money Laundering Act, 2010, Anti-Terrorist Act 1997 or any other criminal offence.