• Rajasthan

    Cong 98
    BJP 74
    RLM 3
    OTH 24
  • Madhya Pradesh

    Cong 111
    BJP 110
    BSP 2
    OTH 7
  • Chhattisgarh

    Cong 67
    BJP 17
    JCC 6
    OTH 0
  • Telangana

    TRS-AIMIM 95
    TDP-Cong 21
    BJP 1
    OTH 2
  • Mizoram

    MNF 26
    Cong 5
    BJP 1
    OTH 8

* Total Tally Reflects Leads + Wins

Sebi adds muscle to supervisory framework for stock brokers

By: | Published: September 27, 2016 1:45 PM

Putting in place enhanced supervisory framework for stock brokers, Sebi has issued a detailed set of guidelines to monitor their financial strength and detect any misutilisation of clients' funds.

According to Sebi, there would be measures to monitor the financial strength of stock brokers by the exchanges "so as to detect any signs of deteriorating financial health of stock brokers and serve as an early warning system to take pre-emptive and remedial measures". (Reuters)According to Sebi, there would be measures to monitor the financial strength of stock brokers by the exchanges “so as to detect any signs of deteriorating financial health of stock brokers and serve as an early warning system to take pre-emptive and remedial measures”. (Reuters)

Putting in place enhanced supervisory framework for stock brokers, Sebi has issued a detailed set of guidelines to monitor their financial strength and detect any misutilisation of clients’ funds.

Besides, stock brokers will now have to follow a uniform nomenclature for “naming/tagging of bank and demat accounts” and reporting of such accounts to stock exchanges and depositories.

Guidelines have been issued for “monitoring of clients funds lying with the stock broker by stock exchanges through a sophisticated alerting and reconciliation mechanism to detect any misutilisation”.

Exchanges have been asked to have the mechanism within three months for monitoring such funds lying with the stock broker to generate alerts on any misuse.

These guidelines have been issued following recommendations made by a Sebi-set up panel on ‘Enhanced Supervision of Stock Brokers’. Representatives from stock exchanges, depositories and brokers were part of the committee.

Among others, changes have been made in the existing system of internal audit for stock brokers and depository participants in terms of various aspects, including “appointment, rotation of internal auditors and formulation of objective sample criteria”.

According to Sebi, there would be measures to monitor the financial strength of stock brokers by the exchanges “so as to detect any signs of deteriorating financial health of stock brokers and serve as an early warning system to take pre-emptive and remedial measures”.

In case of non-compliance with any requirement, uniform penal action will be taken against stock brokers and depository participants by exchanges and depositories.

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