The Sebi’s move to designate some of the country’s top brokers as qualified stock brokers (QSBs) may increase compliance costs for these entities.
Certain stock brokers handle a very large number of clients, a large amount of client funds and very large trading volumes. Any possible failure of such brokers has the potential to cause a widespread impact on investors and reputational damage to the Indian securities market. To mitigate this risk, the Sebi board approved amendments to the Sebi (Stock Brokers) Regulations, 1992 to designate such brokers, based on identified parameters, as QSBs.
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“Three of our RTAs are called qualified RTAs because they handle very, very large volumes of investor data and transactions. They have certain additional requirements which they have to comply with over and above the regular RTAs. In order to mitigate the concentration risk of top brokers, enhanced risk management criteria will be laid down that will cover market risk, IT risk and cyber risks, among other things. Much higher standards will be expected of them and there will be a obligation on MIIs and on Sebi to monitor…
