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MumbaI: The Securities and Exchange Board of India (Sebi) on Thursday warned the Jaipur Stock Exchange Ltd (JSE), advising it to comply with securities laws in letter and spirit, in a timely manner.

Sebi had conducted a probe on the exchange for the period between December 2008 and October 2011 with regard to the renewal of JSE’s recognition. A further ‘special purpose inspection’ of JSE was conducted during 26 July 2012 to 27 July 2012 after complaints from the JSE broker’s forum, alleging unlawful activities and irregularities in the administration of JSE.

Sebi said its probe revealed various lapses and irregularities in the functioning of the exchange.

Two showcause notices served to JSE mentioned violation of MIMPS (manner of increasing and maintaining minimum public shareholding) norms, failure to appoint an executive director since September 2007, and allowing the chairman to act as chief executive for all practical purposes and interfere in the day-to-day affairs of JSE.

The showcause notices also mentioned JSE amending a ‘memorandum of association’ and adopted new ‘articles of association’ without Sebi’s approval, negligently handled board meeting minutes and failed to maintain the base minimum capital of brokers.

However, Sebi in its circular, said that enough evidence was not available to support such allegations. The regulator said that JSE has already taken certain corrective steps after its intervention.

“Though the exchange may attribute its inability to ensure timely compliance with Sebi circulars/ directives to its limited resources, it only shows the lack of its commitment to function as a stock exchange. Having considered the above, I am convinced that JSE was negligent in the discharge of its functions and duties," Sebi’s whole-time member Prashant Saran said while issuing the order.​

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