Explore SEBI’s latest website compliance requirements for Stock Brokers and Depository Participants, effective from August 16, 2023. Learn about the key details they must publish, including basic information, contact details, complaint procedures, and more. Understand the implications for market participants and investors as SEBI takes significant steps towards transparency, investor protection, and improved business practices in the financial market.
The Securities and Exchange Board of India (SEBI) has taken a significant step to enhance transparency, investor protection, and business practices within the financial market. Through a circular dated February 15, 2023, SEBI has introduced new website compliance requirements for Stock Brokers and Depository Participants from August 16, 2023. This article delves into the key aspects of this circular, the information to be published, and the potential implications for both market participants and investors.
The following information is required to be published on the website of a stockbroker and depository participant with effect from August 16, 2023:
i. Basic details of the Stock Broker / Depository Participant such as registration number, registered address of Head Office, and branches, if any.
ii. Names and contact details such as email ids etc. of all key managerial personnel (KMPs) including the compliance officer.
iii. Step-by-step procedures for opening an account, filing a complaint on a designated email id, finding out the status of the complaint, etc.
iv. Details of Authorized Persons.
This information required to be displayed is in addition to information that is already required to be published by the Companies Act, 2013 (if the stock broker/depository participant is being managed under the set up of a company, SEBI (Listing Obligations and Disclosure Requirements), 2015 if the stock broker/depository participant is a listed entity and as specified BSE, SEBI or Depositories otherwise.
SEBI has further stated that the URL to the website of the stockbroker or depository participant shall be reported to the stock exchanges/ depositories within a week of this circular coming into effect.
SEBI has further stated that any modification in the URL shall be reported to stock exchanges/depositories within 3 days of such changes.
Stock Exchanges and Depositories are advised to monitor this compliance and update SEBI in a monthly report to SEBI. Further SEBI has asked to submit a compliance on implementation of this by August 31, 2023.
There have been instances where various miscreants have fakely represented themselves as SEBI registered brokers and have duped gullible investors. This move will help investors identify between fake and genuine brokers. Also, it would help investors identify the process of raising complaints in one place. Till now either investors had to call a toll free or send an email where there was no dedicated mail id. This is a welcome move whereby all relevant information can be made available in one place.
Stock Brokers and Depository Participants shall utilize this to make this their ‘USP’ to further enhance their business. If we see the websites of a few big industry players it is seen that most of the above information is available on their websites. So, it is suggested that as a good practice, all the details as sought by SEBI above shall be kept under a separate tab in such a manner that customers should not find it difficult to find it or trace it It is seen that SEBI is strengthening website disclosure across all market participants. Recently, SEBI through Stock Exchanges had advised listed entities about website compliances.
Conclusion: SEBI’s initiative to enhance website compliance for Stock Brokers and Depository Participants marks a significant stride towards investor protection and transparency within the financial markets. By providing investors with easily accessible information, clear procedures, and designated complaint channels, SEBI aims to empower investors and foster trust. For market participants, this presents an opportunity to distinguish themselves through enhanced transparency and efficient services. As the financial landscape continues to evolve, such measures play a pivotal role in establishing a robust and investor-friendly market environment.
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