Sebi streamlines norms for stock brokers

Written by PTI | New Delhi | Updated: Sep 28 2013, 03:55am hrs
Capital market regulator Sebi today streamlined its norms for stock brokers including for their registration and payment of fees.

The Securities and Exchange Board of India (Sebi) said any person seeking to act as a stock broker is required to be registered with the regulator for each stock exchange in which he plans to operate.

"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.

However, no separate registration would be required for a clearing member registered with Sebi to operate as a stock broker in the stock exchange which has promoted the clearing corporation of which he is a clearing member.

Sebi said that approval for operating in segments of a stock exchange would be granted by the concerned bourse.

The regulator may ask the entity to furnish further information or clarifications, regarding the trading, settling or dealing in securities, while consider the application for grant of a certificate.

Also, it would look in to various factors such as necessary infrastructure and manpower to effectively discharge duties as a stock broker or clearing member. It would also consider whether the person has any past experience in the business of trading or dealing in securities among others.

Sebi can reject an application after giving a reasonable opportunity of being heard. The refusal needs to be communicated within 30-day to the applicant as well as to the concerned entity stating therein the grounds on which it has been rejected.

The applicant can re-apply within a period of 30-days after being intimated by Sebi about the refusal.

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.