SEBI examining brokers’ representation on RBI draft norms, issues under review, says Chairman

SEBI Chairman

SEBI is examining representations from stockbrokers regarding operational challenges arising from proposed banking guidelines, SEBI Chairman Tuhin Kanta Pandey said on Monday, indicating that the matter falls primarily within the Reserve Bank of India’s regulatory domain.

“We have received a representation. I saw it on Friday and we will see what we need to do on that,” Pandey said during a media interaction at the PMS Conclave organised by SEBI, NISM and APMI.

The Reserve Bank of India recently floated draft guidelines tightening how banks provide funding and non-fund based facilities to capital market intermediaries (brokers, trading members, etc.). The comments come after brokers had approached regulators seeking relief and clarity on this concerned draft.

“It is in relation to issues around the bank guarantees and how much collaterals must be given for the proprietary trading and so on. There are three, four issues,” he said.

Pandey clarified that the central bank had already issued draft guidelines and sought stakeholder feedback earlier, and SEBI’s role would be limited to reviewing the concerns placed before it.

“It is basically a matter with the RBI. But since the representation has also come to us, we will have a look at it.”

He declined to indicate whether SEBI would formally convey industry feedback to the banking regulator, saying that it was premature to comment before examining the issues in detail.