/financial-express-hindi/media/media_files/9iqupdoptv2jQsWCFAo6.jpg "SEBI New circular: SEBI’s big instruction to stock brokers, said- make arrangements to detect and prevent fraud")
SEBI’s New Direction for Stock Brokers:The Securities and Exchange Board of India (SEBI) has issued a very important guideline for all the stock brokers of the country. The market regulator has ordered all stock brokers to make such arrangements institutionally so that investors can be protected by identifying fraud and market abuse during stock broking. SEBI has given this instruction through a circular issued on Thursday. The market regulator has said in its circular that the standards and operational details required to implement this new guideline will be prepared by the Industry Standards Forum (ISF) of stock brokers on the basis of SEBI’s advice.
What is in the new circular of SEBI
SEBI has said in its new circular that all stock brokers will have to create a system to monitor business activities and internal control systems. Along with this, they will also have to create a whistle-blower policy to help and protect those who disclose any irregularities. SEBI has issued this circular to implement the “SEBI Stockbrokers Amendment Regulations 2024”. The objective of these amended rules is to prevent any kind of manipulation in the market and ensure high standards of investor protection.
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Deadline is fixed according to the size of stock brokers
The deadline set for implementation of the instructions issued in this circular will be based on the size of the stock brokers. Brokers with more than 50,000 active unique client codes (UCC) will have to implement it by January 1, 2025. While for brokers with 2,001 to 50,000 active UCCs, this deadline has been set as April 1, 2025. At the same time, brokers who have up to 2,000 active UCCs have been given time till April 1, 2026 for this.
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QSBs will have to implement this by August 1
Apart from these, Qualified Stock Brokers (QSBs) will have to implement these guidelines by August 1, 2024, keeping in mind their existing responsibilities related to governance and client behavior. Irrespective of the number of their UCCs. SEBI has said that QSBs are being given less time because they are already implementing more responsibilities in terms of governance structure, processes and client behavior. SEBI has also directed the stock exchanges to bring the provisions of this circular to the notice of stock brokers and publish it on their websites. SEBI has taken many important decisions in the last few days, including reducing the face value of debt securities from Rs 1 lakh to Rs 10 thousand. Apart from this, SEBI Chief Madhabi Puri Buch has made many other important announcements last week, including banning the services of unregulated influencers of brokers and mutual funds and introducing a new formula for determining stock price for voluntary de-listing.
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