Sebi issues norms for SEs on one-time registration process

Capital market regulator Sebi on Monday issued guidelines to stock exchanges and clearing houses that require them to share information about their members, among others, as part of streamlining the registration process for market entities. The Securities and Exchange Board of India (Sebi) had recently notified new norms that require stock brokers and clearing entities to have one-time single registration certificate to operate across different bourses. In a circular, the market regulator has issued guidelines for bourses and clearing corporations for purpose of ‘implementing the revised registration requirements’.

As part of the guidelines, among others, the capital market watchdog has asked the stock exchanges and clearing corporations to ‘coordinate and share information with one another, about their members’.

Further, the guidelines for the bourses and clearing houses pertain to registration process required in case of new market entities as well as existing ones.

A new entity seeking to act as a stock broker or clearing member is required to apply to Sebi through the respective stock exchange or clearing corporation in the manner prescribed in the broker regulations, the regulator said. ‘The entity shall be issued one certificate of registration, irrespective of the stock exchange(s)/clearing corporation(s) or number of segment(s),’ Sebi said.

Meanwhile, an entity already registered with Sebi can directly apply for approval to the concerned exchange or clearing corporation. In such cases, Sebi has to be informed about such grant of approval.

According to the regulator the entities would continue to pay fees for each segment approved by the stock exchange or clearing corporation, as practised currently. Further, Sebi has asked exchanges as well as clearing corporation to grant approval to Sebi registered entities for operating in any segment ‘after exercising due diligence and on being satisfied about the compliance of all relevant eligibility requirements’.

They would have to ensure that the applicant, its directors, proprietor, partners and associates satisfy the 'Fit and Proper Criteria', have taken satisfactory corrective steps to rectify the deficiencies or irregularities observed in the past and all pending dues have been recovered. Among others, the bourses or clearing corporation may also carry out inspection, wherever considered appropriate.

Sebi has directed the exchanges and clearing houses to bring these guidelines to the notice of their members as well as communicate to the regulator about the status of the implementation of these guidelines through monthly development report.