4B. Procedure for corporatisation and demutuali sation.
(1)All recognised stock exchanges
referred to in section 4A shall, within such time as may be specified by the Securities and Exchange
Board of India, submit a scheme for corporatisation and demutu lisation for its approval:
Provided that the Securities and Exchange Board of India, may, by notification in the Official
Gazette, specify name of the recognised stock exchange, which had already been corporatised and
demutualised, and such stoc k exchange shall not be required to submit the scheme under this section.
(2)On receipt of the scheme referred to in sub -section ( 1), the Securities and Exchange Board of
India may, after making such enquiry as may be necessary in this behalf and obtainin g such further
information, if any, as it may require and if it is satisfied that it would be in the interest of the trade and
also in the public interest, approve the scheme with or without modification.
(3)No scheme under sub -section ( 2) shall be approv ed by the Securities and Exchange Board of India
if the issue of shares for a lawful consideration or provision of trading rights in lieu of membership card
of the members of a recognised stock exchange or payment of dividends to members have been proposed
out of any reserves or assets of that stock exchange.
(4)Where the scheme is approved under sub -section ( 2), the scheme so approved sha ll be published
immediately by -
(a)the Securities and Exchange Board of India in the Official Gazette;
(b)the recognised stock exchange in such two daily newspapers circulating in India, as may be
specified by the Securities and Exchange Board of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other
law for t he time being in force or any agreement, award, judgment, decree or other instrument for the time
being in force, the scheme shall have effect and be binding on all persons and authorities including all
members, creditors, depositors and employees of the r ecognised stock exchange and on all persons having