SEBI modifies stock broker norms

India Infoline News Service | Mumbai |

For granting certificate to the brokers, SEBI would take into account matters relating to trading, settling or dealing in securities

Capital market regulator SEBI (Securities and Exchange Board of India) on Friday made changes in the stock brokers and sub-brokers norms.

These regulations—called SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2013—would come into force after their publication in the official gazette.
“No person shall act as a stock broker, unless he seeks a certificate of registration from the Board for each stock exchange in which he seeks to operate, SEBI said in a notification on Friday.

“Provided that no separate registration shall be required for a clearing member.
An application for grant of a certificate of registration as a stock broker shall be submitted to the Board in Form A of Schedule I through the stock exchange(s) of which he is admitted as a member, SEBI added.

The stock exchange(s) shall forward the application form to the Board as early as possible but not later than thirty days from the date of its receipt.

The Board may require the applicant, or the concerned stock exchange, to furnish further information or clarifications, regarding the trading, settling or dealing in securities and matter connected thereto, to consider the application for grant of a certificate.

The applicant or, its principal officer shall, if so required, appear before the Board for personal representation, SEBI said.

For granting certificate to the brokers, SEBI would take into account matters relating to trading, settling or dealing in securities.

The regulator would also consider whether the applicant (a) is eligible to be admitted as a member of a stock exchange; (b) has the necessary infrastructure like adequate office space, equipments and man power to effectively discharge his activities and (c) has any past experience in the business of trading or dealing in securities among others.

SEBI has also revised the fee structure for stock broker and clearing member for different segments with some of the charges would be specified by the regulator from time to time.

The regulator may ask stock broker "to pay such fees at any time before the expiry of six months from the date on which such fees become due."

SEBI has also fixed quantum of networth to be maintained by the stock broker/clearing member for different segments. The regulator said that a stock broker is required to have a networth of Rs 50 lakh to Rs 1 crore and clearing member upto Rs 10 crore.



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