Sebi discontinues sub-broker category

New Delhi: Sebi on Friday said it has done away with the category of sub-brokers as market intermediaries, which require registration with the regulator.

Besides, the markets regulator said no person will be granted a fresh sub-broker registration, and the registered ones will have time till the end of the current fiscal for migrating to act as an authorized person or trading member.

Under the current framework, sub-brokers need to seek registration from the regulator under Sebi (stock broker and sub-broker) norms, while authorised persons need to seek registration from the concerned exchange.

However, there is no difference in the operative role of a sub-broker and that of an authorized person. A sub-broker acts on behalf of a trading member as an agent for assisting investors in dealing with securities.

The move came after Sebi's board in June had approved a proposal to discontinue with sub-broker as an intermediary to be registered with the regulator.

"In view of the same, the need for the category of sub-broker as a market intermediary may no longer be required.

"No fresh registration shall be granted to any person as sub-broker. Any pending applications for registration as sub-brokers under process, shall be returned to the concerned stock exchanges for onward transmission to the applicant," the Securities and Exchange Board of India said in a circular.