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client will not be considered by the  
exchange if: 

a. It is not a mutual fund registered under 

"Securities and Exchange Commission 
(Mutual Fund) Rules, 2001” and any 
Merchant Banker registered under the 
Securities and Exchange Commission 
(Merchant Banker and Portfolio 
Manager) Rules 1996";

b. The size of the merchant banker's 

paid up capital or mutual fund shall 
not be less than 50 (fifty) Crore; 

c. The market maker shall submit 

an undertaking to the exchange 
that it will take all the liability and 
responsibilities of the market-making 
activities in the designated clients’ 
accounts; and

d. If the particular designated client is 

an issuer of the authorized securities 
or a sponsor or a director or a fund 
manager or trustee or custodian 
or holder of 10% or more shares 
or market maker or its director or 
shareholder of 5% or more or its 
subsidiaries or its associates or its 
parent company or related in any 
other ways.

3. Any market maker may be on behalf 

of its designated client shall be able 
to apply for the authorized securities 
only for the purpose of the market 
making activities.

4. The designated client shall have a 

bilateral agreement with the market 
maker and shall delegate all kinds of 
powers to the market maker for the 

Provided that, in accordance with the terms 
of the agreement, each transaction shall be 
completed or executed proportionately on 
the basis of the designated clients account 
and the market maker's own account: 

Furthermore it is provided that in the 
bilateral agreement, among others, the 
proportionate rate (in percentage) of 
contribution shall be mentioned in relation 
to the participation in the transaction of 
designated clients and market maker.

Moreover, the rate of participation in the 
transaction with the designated client or its 
market maker shall not be more than fifty 
percent (50%). 

Last but not the least; the market maker 
shall record the confirmation note of its 
designated client within 24 hours of the 

details of the daily transaction received 
from the designated client.

5. It is required to submit the bilateral 

agreement executed amongst the 
market maker and the designated 
client and the copy of the power 
with the application of inclusion as 
a designated client in the concerned 
exchange and which shall require to 
be vetted by the exchange.

6. If the application is approved by the 

exchange  as a designated client of 
multiple market maker at the same 
time for the creation of a specific 
authorized securities market;

8. Any market creator shall not include 

more than three designated client for 
the making of a specific authorized 
securities market;

9. The designated client cannot 

discontinue the securities transaction 
as related to it, without obtaining 
permission before 15 days prior to the 
exchange by the market maker. 

Provided that, with the permission of the 
exchange, any designated client may cease 
or discontinue the transactions of securities, 
if at least 90 (ninety) days have not elapsed 
from the date of suspension, then it shall