Sebi Allows Stock Brokers To Operate In govt Securities Market Using Separate Unit

SEBI: Market regulator Sebi on Tuesday allowed registered inventory brokers to access the Negotiated Dealing System-Order Matching platform for trading in government securities below a separate enterprise entity.

The circulate follows a notification issued by way of the Reserve Bank of India (RBI) on February 7 allowing Sebi-registered non-bank brokers access to the Negotiated Dealing System-Order Matching (NDS-OM).

“In order to facilitate Sebi-registered stock brokers to participate in Government Securities (G-Secs) marketplace in the NDS-OM, it’s been decided that they will achieve this under a Separate Business Unit (SBU) of the stock broking entity itself,” the regulator said in a circular.

Sebi highlighted that topics relating to coverage, eligibility, hazard control, investor grievances, inspections, enforcement and claims regarding stock agents buying and selling on NDS-OM are ruled by way of the regulatory framework of the concerned authority.

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The round also said that the commercial enterprise vicinity facilitating such trading can even come beneath its jurisdiction.

According to the market regulator, inventory brokers may be required to create a separate commercial enterprise unit (SBU) inside their firm to ensure that its operations are wonderful from their normal securities market operations.

Stockbrokers should preserve an arm’s duration relationship among their center securities sports and the SBU’s transactions in government securities. As consistent with the prescribed rules, the SBU will exclusively engage in sports conducted at the NDS-OM platform.

Additionally, brokers are required to put together and preserve separate debts for the SBU and the internet worth of the enterprise unit in the securities market is kept break free the net really worth of the stockbroker.

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The Securities and Exchange Board of India (Sebi) has mandated that brokers have to have net really worth standards besides for SBU accounts.

The regulator also clarified that the activities of the business unit can be under the jurisdiction of another regulatory frame of stock exchanges, complaint redressal mechanism and investor protection fund (IPF), and Sebi’s rating will now not be to be had to buyers availing the offerings of SBUs.