The Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2023, have been published by the SEBI.
According to the SEBI (Stock Brokers and Sub Brokers) Regulations of 1992, all stock brokers are registered with SEBI.
On the basis of the following parameters and the appropriate weights thereon, a notification issued by The Board may designate a stockbroker as a qualified stockbroker in light of its size and scale of operations, likely impact on investors and the securities market, and governance and service standards:
a) The total number of current customers
b) The stock broker’s clients’ total available assets
c) The stock broker’s trading volume
d) The margin obligations at the end of the day for every stock broker client
e) The compliance score that the Board may set
f) A score for grievance redress, as determined by the Board; and
g) The stock broker’s proprietary trading volumes.
The stockbroker who has been designated as a qualified stockbroker must fulfill more stringent obligations and fulfill responsibilities to ensure:
a) The right governance procedures and structure
b) The proper procedures and policies for risk management
c) a technical capacity and scalable infrastructure
d) A framework for a smooth exit
e) A solid framework and procedures for cyber security; and
f) Investor services, which include a way to file a complaint online.
On February 23, 2022, the Securities and Exchange Board of India (SEBI) has issued the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2022 to further amend the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992.
