SEBI's Game-Changing Revamp: How New Proposals Will Transform Stock Brokers' Regulations

SEBI is proposing a revamp of stock brokers' regulations, including defining 'algorithmic trading' and granting brokers access to the NDS-OM platform for government securities trading. The new framework aims to reduce compliance costs while enhancing investor protection and aligning with the Companies Act, 2013.

In a significant move, markets regulator Sebi has unveiled new proposals designed to redefine the landscape for stock brokers in India. Central to these proposals is the introduction of a clear definition for 'algorithmic trading,' an area that has long been ambiguous under existing regulations.

This revamp proposes to allow stock brokers access to the Negotiated Dealing System, Order Matching (NDS-OM) platform, traditionally reserved for banks and primary dealers. The platform is crucial for trading in government securities, broadening opportunities for brokers under Sebi's proposed framework.

Additionally, Sebi seeks to integrate obligations, bolster cyber security measures, and align the new regulations with the Companies Act, 2013. The reform aims to balance investor protection with reduced compliance costs, fostering growth and trust within the industry. Public feedback on these proposals is open until September 3.

(With inputs from agencies.)