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Sebi board clears one-time registration system for brokers

PTI August 11, 2014 13:10 IST
New Delhi: To simplify procedural requirements in capital markets, Sebi on Sunday cleared a one-time single registration process for stock brokers and clearing entities to allow them operate across different bourses.

"There will be a single registration for brokers. Their life will be made much easier now," Sebi Chairman U K Sinha said.

The proposal, which would replace the current practice of requiring separate registration certificate to trade in each stock exchange, was discussed and approved at a meeting of Sebi board here today. The board meeting was also addressed by Finance Minister Arun Jaitley.

Explaining the rationale behind the move, Sinha told reporters that "long ago we had a system that every broker had to take a decision with regard to investments made by them that they will have separate registrations.

"Those things have been done away with ... Now, there is no need for separate registrations. and one-time registration will be done. That has been approved by the board," he said.

The new system would ensure cost efficiency, avoidance of multiple due-diligence and duplication of registration process.

Under the new norms, stock brokers and clearing members would be required to have only single certificate of registration issued by the Securities and Exchange Board of India (Sebi).

The exchanges will develop a mechanism to ensure appropriate due diligence while granting subsequent approvals, coordination and sharing of information among themselves about their members.

The process would also decrease the number of registration applications received by Sebi and in turn help the regulator save costs and utilise the resources for better supervision and monitoring of the market intermediaries.

The new norms also have a provision for Sebi suspending brokers from the stock exchanges in case of violations.

Besides, as currently practised, the fees paid by the stock brokers would be based on their turnover on stock exchanges under the proposed norms.

Last year, the market regulator had introduced a common registration certificate for stock brokers to function in different market segments within a stock exchange.

Under this system, an entity is issued a certificate with a unique registration number for each stock exchange or clearing corporation, as case may be, irrespective of number of market segments.

Further, if the entity is already registered with any segment of a stock exchange then for operating in any other segment it need not apply to Sebi but can directly seek approval from the bourse or clearing corporation concerned.