News

Designation as Qualified Stock Brokers: New Parameters Added

To bolster trust in the securities market, the Securities and Exchange Board of India (SEBI) has come out with certain measures, providing additional parameters for stock brokers to be designated as Qualified Stock Brokers (QSBs).

The additional parameters, as per SEBI’s circular dated March 11, 2024, include the stock broker’s compliance score, grievance redressal score, and proprietary trading volumes. This brings the total number of parameters to seven. The circular is set to be implemented in a phased manner depending on the parameters.

With respect to the first five parameters (i.e., the total number of active clients, the available total assets of clients, the trading volumes excluding the proprietary trading volume, the end-of-day margin obligations of all clients excluding the proprietary margin obligation of the stock broker in all segments, and the proprietary trading volumes), the effective date of implementation is June 1st of the subsequent year. When it comes to the remaining parameters, (compliance and grievance redressal scores), the applicable date is September 1st of the subsequent year.

Further, stock brokers may voluntarily get designated as QSBs. The stock exchanges are expected to issue the revised list of QSBs, after which the QSBs which do not form part of the list must continue to comply with the additional responsibilities for a further duration of three financial years or such time as prescribed by the Market Infrastructure Institutions, in consultation with SEBI.

 

Date: March 12, 2024