FE Report (November 10, 2010)
The SEC said from now on it will not receive any letter sent by stock brokers and merchant banks unless the letter bears signature of the company CEO or MD.
The Securities and Exchange Commission (SEC) Sunday informed the stock brokers and merchant banks about the decision.
The move came after some irregularities, regarding the norms of company letters, identified by the SEC.
An SEC official said the regulator will not receive any letter from stock brokers and merchant banks without signature of the company CEO or authorised person for the sake of proper verification.
"The letters sent to the SEC must be signed by the company's chief executive officer (CEO) or managing director (MD) according to normal norms," the official said.
"Sometimes the letters sent to the SEC bear very sensitive information. That's why the regulator needs to be confirmed that the letter is verified by the company's higher authority."
"So any letter sent to the SEC must be signed by the company CEO or MD or acting CEO," he added.
Recently, the SEC refused to accept a letter, sent by a stock broker, as it was not signed by the company CEO. When the company clarified that its CEO was abroad, the SEC received the letter, signed by the authorised person.
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