SECURITIES AND EXCHANGE BOARD OF INDIA

NOTIFICATION

Mumbai, the 17th January, 2023

SECURITIES AND EXCHANGE BOARD OF INDIA (STOCK BROKERS) (AMENDMENT) REGULATIONS, 2023

No. SEBI/LAD-NRO/GN/2023/116.— In exercise of the powers conferred under Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to amend the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992, namely: –

1. These regulations may be called the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2023.

2. They shall come into force on the date of their publication in the Official Gazette:

Provided that the amendments in Regulation 17, Schedule V and Schedule VI shall come into force on such date as the Board may by notification appoint in the Official Gazette.

3. In the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 –

I. in regulation 2, in sub-regulation (1), after clause (cb), the following new clause shall be inserted, namely, – “(cc) “qualified stock broker” means a stock broker referred to in regulation 18D of these regulations;”

II. in Regulation 17, after sub-regulation (1), the following new sub-regulation shall be inserted, namely, –

“(1A) A stock broker in the Execution Only Platforms segment, shall keep and maintain the books of account, records and documents as may be specified by the Board from time to time.”

III. after regulation 18A , the following new regulation shall be inserted, namely, –

“Enhanced obligations and responsibilities for qualified stock brokers.

18D. (1) The Board may designate a stock broker as a qualified stock broker having regard to its size and scale of operations, likely impact on investors and securities market, as well as governance and service standards, on the basis of the following parameters and the appropriate weightages thereon: –

a) the total number of active clients;

b) the available total assets of clients with the stock broker;

c) the trading volumes of the stock broker;

d) the end of day margin obligations of all clients of a stock broker;

e) compliance score as may be specified by the Board;

f) grievance redressal score as may be specified by the Board; and

g) the proprietary trading volumes of the stock broker.

(2). The stock broker designated as a qualified stock broker shall be required to meet enhanced obligations and discharge responsibilities to ensure: –

a) appropriate governance structure and processes;

b) appropriate risk management policy and processes;

c) scalable infrastructure and appropriate technical capacity;

d) framework for orderly winding down;

e) robust cyber security framework and processes; and

f) investor services including online complaint redressal mechanism.”

IV. in Schedule V, in Part B, in clause 3, in sub-clause (1), in the Table, after the row for the „Electronic Gold Receipt Segment‟, the following row shall be inserted, namely, –

Segment Rate/Amount (in ₹) Remarks
Stock broker Clearing member Self-clearing member
Execution
Only
Platforms
* * *

V. in Schedule VI,

(i) in Table 1, after the remarks “# Networth requirement for members shall be Base Networth or Variable Networth, whichever is higher.”, the following shall be inserted, namely,-

“However, the requirement of Variable Networth shall not be applicable for Execution Only Platforms segment.”

(ii) in Table 2, after the row for the Electronic Gold Receipts‟ Segment, the following new row shall be inserted, namely,-

Segment Trading Member (in ₹) Clearing member (in ₹) Self-clearing member (in ₹)
Execution        Only Platforms * * *

BABITHA RAYUDU, Executive Director

[ADVT.-III/4/Exty./568/2022-23]

Footnotes:

1. Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992, the Principal Regulations, was published in the Gazette of India on October 23, 1992 vide S.O. No. 780 (E).

2. The Principal Regulations were subsequently amended on:

a) November 28, 1995 by the SEBI (Payment of Fees) (Amendment) Regulations, 1995 vide S.O. No. 939 (E).

b) January 5, 1998 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 1998 vide S.O. No. 13 (E).

c) January 21, 1998 by SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 1998 vide S.O. No. 75 (E).

d) December 16, 1998 by SEBI (Stock Brokers and Sub-Brokers) (Third Amendment) Regulations, 1998 vide S.O. No. 1078 (E).

e) July 6, 1999 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 1999 vide S.O. No. 541 (E).

f) March 14, 2000 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2000 vide S.O. No. 234 (E).

g) March 28, 2000 by SEBI (Appeal to Securities Appellate Tribunal) (Amendment) Regulations, 2000 vide S.O. No. 278 (E).

h) August 30, 2000 by SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2000 vide S.O. No. 787 (E).

i) May 29, 2001 by SEBI (Investment Advice by Intermediaries) (Amendment) Regulations, 2001 vide S.O. No. 476(E).

j) November 15, 2001 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2001 vide S.O. No. 1128 (E).

k) February 20, 2002 by SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2002vide S.O. No. 220 (E).

l) September 27, 2002 by SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 vide S.O. No. 1045 (E).

m) September 23, 2003 by the SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2003 vide S.O. No. 1095 (E).

n) November 20, 2003 by the SEBI (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2003 vide F. No. SEBI /LAD /20795 /2003.

o) March 10, 2004 by the Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004 vide S.O. No. 398(E).

p) August 1, 2006 by the SEBI (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2006 vide S.O. No. 1235 (E).

q) September 7, 2006 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2006 vide S.O. No. 1447 (E).

r) September 25, 2006 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) (Third Amendment) Regulations, 2006 vide S.O. No. 1600(E).

s) May 26, 2008 by the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 vide Notification No. LAD-NRO/GN/2008/11/126538.

t) August 11, 2008 by the Securities and Exchange Board of India (Stock Brokers and Sub Brokers) (Amendment) Regulations, 2008 vide Notification No. LADNRO/GN/2008/20/134766.

u) June 29, 2009 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2009 vide Notification No. LADNRO/ GN/2009- 10/11/167759.

v) November 19, 2009 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2009 vide Notification No. LADNRO/GN/2009-10/21/183853.

w) April 13, 2010 by the Securities and Exchange Board of India (Stock Brokers and Sub Brokers) (Amendment) Regulations, 2010 vide Notification No. LADNRO/GN/2010-11/06/1097.

x) April 6, 2011 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2011 vide Notification No. F. No. LAD –NRO/ GN/ 2011 –12/01/11486.

y) April 19, 2011 by the Securities and Exchange Board of India (Change in Conditions of Registration of Certain Intermediaries) (Amendment)Regulations, 2011 vide Notification No. LAD/NRO/GN/2011-12/03/12650.

z) August 17, 2011 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2011 vide Notification No. LAD-NRO/GN/2011-12/19/26273

aa) April 5, 2013 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2013 vide Notification No. LAD-NRO/GN/2013-14/01/8129

bb) September 27, 2013 by the Securities and Exchange Board of India (Stock Brokers and Sub- Brokers) (Second Amendment) Regulations, 2013 vide Notification No. No. LADNRO/GN/2013-14/25/24775.

cc) May 23, 2014 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 vide Notification No. LAD-NRO/GN/2014-15/03/1089.

dd) October 8, 2014 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2014 vide Notification No. LAD-NRO/GN/2014-15/15/1671.

ee) September 8, 2015 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers)(Amendment) Regulations, 2015 vide Notification No. LAD-NRO/GN/2015- 16/017

ff) March 6, 2017 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide Notification No. LAD-NRO/GN/2016- 17/037 read with March 29, 2017 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide Notification No. LAD-NRO/GN/2016- 17/038

gg) July 13, 2017 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers)(Amendment) Regulations, 2017 vide Notification No. LAD-NRO/GN/2017-18/005.

hh) March 13, 2018 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) (Amendment) Regulations, 2018 vide Notification No. SEBI/LAD-NRO/GN/2018/03.

ii) July 30, 2018 by the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers)(Second Amendment) Regulations, 2018 vide Notification No. SEBI/LAD-NRO/GN/2018/27.

jj) March 22, 2019 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2019 vide Notification No. SEBI/LAD-NRO/GN/2019/03.

kk) April 17, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide Notification No. SEBI/LAD-NRO/GN/2020/10.

ll) May 08, 2020 the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2020vide Notification No. SEBI/LAD-NRO/GN/2020/011.

mm) March 30, 2021 by the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2021 vide Notification no. SEBI/LAD-NRO/GN/2021/14.

nn) May 05, 2021 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2021 vide Notification no. SEBI/LAD-NRO/GN/2021/23.

oo) August 03, 2021 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021 vide Notification no. SEBI/LAD-NRO/GN/2021/30.

pp) February 23, 2022 by the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2022 vide Notification no. SEBI/LAD-NRO/GN/2022/73.

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