Leading stock exchanges BSE and NSE have asked brokers to submit risk-based supervision (RBS) data for the past fiscal year (2015-16) by May 15.
The submission of data is mandatory for all active members of the exchanges (those who have executed/cleared even a single trade during April 1, 2015- March 31, 2016).
Besides, the exchanges have issued a format for disclosing risk-based supervision information. In this format, brokers will have to submit details regarding registered office, code number, details of branches, registration number and its date, year of incorporation as well as year of membership among others.
The brokers who fail to make timely submission of risk-based supervision data will be slapped monetary penalty starting from Rs 10,000. Besides, prolonged non-compliance would result in disablement of trading terminals.
The exchanges introduced a new risk-based model for supervision of market entities, following markets regulator Sebi's directions.
Trading members have been submitting risk-based supervision data since 2013-14. However, there have been instances of delayed or non-submission of data.
Accordingly, the exchanges, in consultation with Sebi formulated the timetable for submission of RBS data and also the penalty provisions for delayed or non-submission of such provision.
In separate circulars, the exchanges said that brokers will have to submit risk-based supervision data for the fiscal ended March 31, by May 15 in order to avoid any penalty or disciplinary action.
The Securities and Exchange Board of India (Sebi) has decided to adopt this new supervision model, based on level of risks posed by a market entity, to help it better regulate the marketplace and strengthen its surveillance system.
Under the model, various market entities are divided broadly into four groups - very low risk, low risk, medium risk and high risk - and the quantum of surveillance and number of inspections would increase as per the risk level.
The move helps the surveillance system take care of most of the smaller offences, so that the investigation resources are utilised more effectively to tackle serious violations in the market place.
The data collated from the members towards risk based supervision would be shared with the capital market regulator.
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