Sebi eases norms for stock brokers to provide internet-based trading

The changes have been made based on the recommendations made by the working group of market infrastructure institutions (MIIs) and Secondary Market Advisory Committee.

The market regulator has eased norms for internet-based trading (IBT) for stock brokers, including reducing the timeline by which stock exchanges have to give their decision on the broker's application to a fourth.

In a circular dated May 30, the Securities and Exchange Board of India (Sebi) listed the changes that have been made to the Master Circular for Stock

Exchanges and Clearing Corporations dated October 16, 2023. The changes have been put into immediate effect.

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The circular stated that the changes have been made based on the recommendations made by the working group of market infrastructure institutions (MIIs) and Secondary Market Advisory Committee.

The changes are as follows:

1.As per the existing master circular, the broker is required to apply to the respective stock exchange for a formal permission to provide IBT Service. The stock exchange is required to communicate its decision to the member within 30 calendar days of the date of completed application submitted to the exchange. With the latest circular, the timeline for the exchange reverting to the broker has been reduced to 7 calendar days.

2. Brokers providing IBT service are required to make periodic reporting to the Exchange as specified by the Exchange. Exchanges then compute IBT trade statistics for each stock broker based on the terminal details provided by the broker. After this latest circular, brokers will no longer be required to do periodic confirmation of the IBT statistics before the exchanges publish them. The latest circular says that the exchanges can publish the statistics based on the details of IBT terminals provided by the brokers and the exchanges are free to obtain information/declaration about the IBT terminals from the brokers as they see fit.

(This is a developing story. Please come back for updates.)