“Certain stockbrokers, due to various factors like their size, trading volumes and amount of clients’ funds handled by them, have come to occupy a significant position in the Indian securities market,” the regulator said in a circular, adding that this was leading to concentration of activity among a few stock brokers.
It identified 16 large stockbrokers that would be qualified as QSBs.
Sebi said QSBs cater to the needs of a large number of investors and, therefore, it was imperative for them to adhere to the regulatory guidelines, provide satisfactory services to investors and resolve investor complaints. The failure of such stockbrokers has the potential to cause disruption in the services they provide, causing widespread impact in the securities market, it added.
The stockbrokers designated as QSBs must meet enhanced obligations and discharge responsibilities to ensure appropriate governance structure, risk management policy and processes, scalable infrastructure and technical capacity, framework for orderly winding down, robust cyber security framework, and investor services including an online complaint redressal mechanism, Sebi said.
The parameters for designating a stockbroker as QSB would be the total number of active clients, available total assets of clients, trading volumes and the end-of-day margin obligations of all clients.
Sebi has proposed enhanced governance structure and processes for QSBs. Their boards should exercise oversight over incidents having an impact on functioning of the QSB in the securities market and investor protection, including data security breaches that could affect investor data, the regulator said.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
