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Coronavirus: Sebi eases compliance requirements for brokers, mutual funds

Coronavirus: Sebi eases compliance requirements for brokers, mutual funds

New Delhi: In a bid to reduce compliance burden on market participants, Sebi on Monday provided various relaxations to stock brokers and mutual fund houses, including extension in deadline for submission of financial results and disclosures on commission paid to distributors.

This is the latest in a series of measures taken by the watchdog in the wake of the coronavirus pandemic, which has also resulted in large scale sell-off in the domestic market.

Sebi also said the central government has requested states and Union Territories to keep the services of stock market entities exempted from the purview of lockdown as well as permit essential staff of the stock market participant to commute to their offices.

According to the regulator, it is closely monitoring movements in the domestic market and has been taking appropriate measures from time to time.

Also, Sebi is actively engaged with global bodies like International Organization of Securities Commissions (IOSCO) and Financial Stability Board (FSB) at the global level, it said in a statement.

Among the relaxations for brokers, Sebi said penal provision for non-collection or short collection of margins by brokers which was to be implemented from April 1 has been deferred till April 30.

However, reporting of such margins in cash and derivatives segments would continue to be done by the brokers. Further, Sebi said brokers working from designated alternate locations have been exempted from the penal provisions for not maintaining call recordings of orders or instructions received from clients till March 31, 2020.

Brokers and exchanges would have to send a confirmation on the registered mobile number of the client immediately after execution of the order. The delay in submission of various reports by trading members would not attract penal provisions till April 30.

Sebi noted that brokers would be placed in risk reduction mode upon utilisation of 90% – instead of existing level of 85% – of the members' capital towards margins. With regard to relaxation to mutual fund houses, Sebi said deadline for half-yearly disclosures of financial results have been extended by one month till May 31.

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