Sebi Simplifies Framework for Stock Brokers Amid Technical Glitches

Sebi has revamped the framework for technical glitches in stock brokers' trading systems, excluding smaller brokers, easing compliance, and rationalizing penalties. The revised framework targets brokers with over 10,000 clients and excludes uncontrollable or minor glitches, aiming to boost business ease and transparency.

The Securities and Exchange Board of India (Sebi) has announced major changes to the existing framework for handling technical glitches in stock brokers' electronic trading systems. These changes are aimed at easing compliance norms, rationalizing financial penalties, and excluding smaller brokers from stringent rules.

The revised framework excludes glitches that occur beyond brokers' control or have minimal impact, while only brokers with over 10,000 registered clients remain under its purview. This policy shift is expected to lighten the compliance load for approximately 60% of the brokers.

Additionally, Sebi has extended reporting times for glitches, introduced a unified reporting platform, and revised financial disincentive structures. The framework, effective immediately, seeks to enhance transparency and facilitate business operations for market intermediaries.

(With inputs from agencies.)