Brokers may have to wait for some more time for representation on the National Stock Exchange board.
The country's largest stock exchange, which recently amended its rules and bye-laws to allow trading members to hold up to 25 per cent board positions through an election, was in no hurry to implement these changes, said people in the know.
The new bye-laws also provide for a director nominated by the Securities and Exchange Board of India.
Last year, Sebi had issued guidelines for including trading members on boards of exchanges.
Asked in an e-mail when it planned to implement these changes, NSE declined comment.
The amendments in rules, bye-laws and Articles of Association were carried out through three circulars, dated May 6, issued by the exchange's secretariat and the legal department.
The changes came into effect from April 9.
Deven Choksey, managing director of K R Choksey Shares and Securities, one of the oldest broking firms, said, "It seems NSE has serious reservations against bringing brokers on its board. I feel brokers have a major role to play on the NSE broad."
NSE is the fourth- largest exchange in the world in terms of the number of shares traded, after NYSE-Euronext, Nasdaq, OMX and Shanghai Stock Exchange.
NSE, whose average daily turnover is over Rs 1 lakh crore (Rs 1 trillion) in equity cash and derivatives combined, has over 1,000 registered trading members.
The brokers feel their participation will bring significant changes in the system.
Sandeep Parekh, a former executive director in Sebi's legal department and the founder of Finsec Law Advisors, is in favour of brokers joining the board.
He said unlike the Bombay Stock Exchange, where brokers were also shareholders and there might be a conflict of interest, NSE had no such issue.
"The industry should have a voice. Even Securities Contract Regulation Act says this," Parekh said.
The BSE board has three trading members -- Deena Mehta of Asit C Mehta, Uttam Bagri of BCB Brokerage and Balkishan Mohta.
The NSE board has 16 members, including representatives of various banks and insurance companies.
In other amendments, NSE's disciplinary action committee can no longer delegate any power to the managing director of the exchange.
Also, an investor services committee has to be constituted to 'supervise the working of the investors' services cell of the exchange and in suitable cases attend to the grievances of investors personally.'
At least 80 per cent members of the investor services committee will be non-trading members.
Besides, the defaulters' committee and the disciplinary action committee will have at least 80 per cent members from among non-trading members, as against 60 per cent at present.
Also, NSE would not need prior approval from Sebi on who should be nominated to these two committees.
An amendment has also been made to drop a clause according to which the disciplinary action committee may delegate any of its power to the managing director.
Also, the words 'Sebi directors' have been replaced with 'Sebi nominee directors' and 'public representative' with 'public interest directors' in connection with the board's composition.