PRESENTATION TO

Shri Ravi Narain

Managing Director & CEO.

National Stock Exchange of India Limited

8th June, 2009

Points for Discussion with NSE

PRIORITY ITEMS

1
Sr. Page
INDEX
no. No.

A PRIORITY - I
1 Defaulter’s client List
3
2 Tainted and Debarred Clients List 3
3 Fungibility of Capital available across all segments 3

B PRIORITY – II

Increase in the number of custodians for pledging of shares in collateral to

1. 4
increase competition resulting into fair price for the members

2. System driven Auto Square Off for efficient Risk Management 4

3. Authorized Person concept for cash segment
4
4 Multiple Clearing Banks for PAY-IN 4

2
 A) PRIORITY - I

1 Defaulter’s client List

ANMI has now made ready the software (“ABCD” - ANMI Bureau of Client
Defaults) necessary to maintain a database of clients who have defaulted to brokers,
so that brokers can be protected from fraud and habitual client default to multiple
brokers. This software will be put into place shortly as soon as client confidentiality
and other legal/security issues are properly resolved, with the assistance of the
Exchange and SEBI. ANMI is also looking for a competent and credible third party
vendor to manage/operate and update the software as well as maintain the server on a
continuous basis with accountability.

The Stock Exchange can also put on the website the List of Brokers/clients whose
Arbitrations pending / passed against.

2 Tainted and Debarred Clients List

The Stock Exchanges/ SEBI and SAT currently provide the Member brokers list of all
Debarred / Tainted Clients along with the PAN CARD Numbers. However, at times
this does not contain the PAN Numbers of all clients. It is difficult to comply with the
regulators order at member broker level for existing and new client a/c. We request
that such details should be integral part of the order and we suggest that the Exchange
to maintain a database of Debarred / Tainted clients and sue motto block them when
the Member broker uploads New Clients UCC data on daily basis. For existing clients
whose accounts are operative, exchange can intimate the member brokers about the
same.

3 Fungibility of Capital available across all Segments

We request that all capital available (Additional base capital, Base capital, etc.) be
made fungible across all the segments that is CASH, F&O and Currency derivatives
as it would optimize the utilization of funds.

3
 B) PRIORITY - II

1) Increase in the number of custodians for pledging of shares in collateral to

increase competition resulting into fair price for the members.
Currently collateral pledging of shares is undertaken with three custodians, namely
ICICI Bank, HDFC Bank and SHCIL. These custodians are charging exorbitant
transaction fees and on an ad-valorem basis. Members request you to increase the
number of custodians to pledge securities so that a competitive environment is
created, which will result in fair price play.

2) System driven Auto Square Off for efficient Risk Management.

ANMI have earlier addressed a letter to NSE to permit Auto Square off on CTCL
systems since this is to be considered as a very important risk management measure,
and not as automated trading done for the purpose of making a profit. This is very
essential to facilitate more disciplined risk management in the interest of the
members’ safety. This is a feature that members have along used to protect
themselves prudently, as well as to develop the market in a disciplined manner. We
await an official response to our request.

3) Authorized Person concept for cash segment

In order to pave the way for better compliance of systems and the rules governing
member-constituent agreements, NSE may permit an Authorized Person in the cash
segment in lieu of sub-brokers. It will do away the requirement of a tripartite
agreement and several other associated complicated compliance issues. We have
taken this matter up with SEBI and your active support for this may help resolve the
matter expeditiously.

4) Multiple Clearing Banks for PAY-IN

In the current scenario / system, pay-in as well as payout of funds is made through the
same clearing bank designated account. Currently the exchange has allowed multiple
clearing banks for ABC (Additional Base Capital). It would be of immense benefit to
the members if the same is made available for pay-in of funds, or at least early pay-in
of funds.