SEBI amends Stock Brokers Regulations 1992

The Securities and Exchange Board of India (SEBI) amends Stock Brokers Regulations Regulation 1992 and Notifies Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2023 via issuing Notification.

The Notification Stated, “In exercise of the powers conferred under Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to amend the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992, namely: –

1. These regulations may be called the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2023.

2. They shall come into force on the date of their publication in the Official Gazette: Provided that the amendments in Regulation 17, Schedule V and Schedule VI shall come into force on such date as the Board may by notification appoint in the Official Gazette.”

Following new regulation inserted after regulation 18A:-

Enhanced obligations and responsibilities for qualified stock brokers, which defines:

“The Board may designate a stock broker as a qualified stock broker having regard to its size and scale of operations, likely impact on investors and securities market, as well as governance and service standards, on the basis of the following parameters and the appropriate weightages thereon: –

a) the total number of active clients;

b) the available total assets of clients with the stock broker;

c) the trading volumes of the stock broker;

d) the end of day margin obligations of all clients of a stock broker;

e) compliance score as may be specified by the Board;

f) grievance redressal score as may be specified by the Board; and

g) the proprietary trading volumes of the stock broker.”

The stock broker designated as a qualified stock broker shall be required to meet enhanced obligations and discharge responsibilities to ensure: – a) appropriate governance structure and processes; b) appropriate risk management policy and processes; c) scalable infrastructure and appropriate technical capacity; d) framework for orderly winding down; e) robust cyber security framework and processes; and f) investor services including online complaint redressal mechanism.

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