Sebi Stock Broker Rules Overhaul: Timeline and Key Points
Why in the news
Sebi announced a plan to modernise rules for stock brokers that date back to the early 1990s, aiming at stronger risk handling, data protection and market resilience.
Key facts
- Target: finalise reforms by December 2025, after an August 2025 discussion paper.
- The paper suggested new definitions for algorithmic and proprietary trading and simpler broker norms.
- Sebi was examining technical glitches at MCX; the exchange shifted to a TCS-built trading engine in October 2023, replacing 63 Moons Technologies. The chairman wants root-cause analysis.
- Physical shareholders who bought securities before FY20 and could not complete transfer may now lodge them in their own name.
- Angel One settled a disclosure-violation case by paying ₹34 lakh; the show-cause notice had come in April.
About the stock broker regulations
- The SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 say who counts as a broker or sub-broker, and set registration, eligibility, conduct and disciplinary norms.
- Goals: investor protection, market integrity, accountability, risk management and transparency.
| Provision (1992 rules) | What it requires |
|---|---|
| Registration | Every broker and sub-broker registered with Sebi and the exchange |
| Capital adequacy | Minimum net worth and deposits |
| Client protection | Separate client and own-fund accounts; contract notes after each trade |
| Reporting | Periodic financial and compliance reports |
| Grievances | Complaints via SCORES and exchange systems |
Exam angle
- Sebi chairman: Tuhin Kanta Pandey.
- Core law: SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992.
- Complaint platform: SCORES.