Stock exchanges BSE and NSE have designated 15 trading platforms as Qualified Stock Brokers (QSBs) with effect from July 1, 2023. The shortlisted stock brokers must fulfill additional responsibilities and meet new obligations. Zerodha Broking, 5Paisa Capital, HDFC Securities, IIFL Securities, ICICI Securities, Motilal Financial Services, Kotak Securities, and Sharekhan are among the notable stock brokers on the QSB list.
Angle One, Anand Rathi Share & Stock Brokers, Global Capital Market, Jainam Broking, Nextbillion Wealth and Investment, and RKSV Securities India, which trades under the Upstox brand, are all additional designated QSBs.
Sebi issued guidelines in January to designate certain stock brokers as QSBs based on their governance and service standards, size and scale of operations, likely impact on investors and the securities market, and other factors.
The guidelines were issued after the Securities and Exchange Board (Sebi) observed that a small number of stock brokers were gaining prominence in the Indian securities market as a result of their size, trading volume, and the volume of client funds they managed.
As a result, the designation of QSBs is intended to safeguard investors’ interests in the securities market and ensure the orderly operation of the market.
According to Sebi guidelines, QSBs play the following important roles:
* Incidents and vulnerabilities that have an effect on the QSB‘s operation in the securities market and investor protection, such as data security breaches that have the potential to affect investor data, must be overseen by the Board of Directors (BoD) or another similar body of QSBs.
*A clear and well-documented risk management policy must be developed by QSBs.
* The gamble the executives structure will have apportions for conveying observation of client conduct by examining the example of exchanging done by clients, discovery of any surprising movement being finished by such clients, announcing something very similar to stock trades and going to vital lengths to forestall any sort of false action in the market as far as the administrative prerequisites endorsed by SEBI and MIIs.
In order to ensure the smooth operation of their operations and the security of investor data, QSBs are required to keep adequate human resources, systems, procedures, and processes in place.
*The QSB staff will receive the resources and assistance they need to perform their jobs effectively and efficiently. Employees of the QSBs are required to receive regular training on topics related to the activities they oversee.
In order to guarantee the smooth operation and scalability of providing services to investors at all times, QSBs must establish a policy framework for the periodic upgrade of infrastructure and technology that has been approved by its IT committee. A framework of this kind ought to be examined every half year.
In the event that the QSB closes its business for any reason, such as its inability to provide services to its clients or meet the prescribed regulatory requirements, it must establish a framework for the orderly winding down of its business to guarantee that its customers will continue to receive services.
*In every city where they have branches, QSBs are required to have investor service centers.