Stockbrokers and clearing members will now be regulated by Sebi (Stock Brokers) Regulations 2026 (SB Regulation), which has now replaced Sebi’s (Stock Brokers) Regulations 1992.The new rules include simplified regulatory language, remove outdated provisions and introduce clearer definitions. This move aims to modernize the regulatory architecture in line with evolving market practices while making compliance easier and more transparent for market intermediaries.
Sebi on December 17 approved the proposal to revise the regulatory framework for stockbrokers, paving the way for the new rules.
The Supervisory Board Regulations are structured in eleven chapters, in which the most important aspects of the supervisory regime for stockbrokers are discussed in detail.
The regulations have been simplified and shortened, with the number of pages reduced from 59 to 24, and the word count reduced. The market regulator had earlier said that the word count will decrease from 18,846 words to 9,073 words.
As part of the refresh, Sebi has removed certain schedules that are no longer necessary and integrated relevant schedules directly into the regulations as chapters to improve readability and understanding.
For example, historic and inapplicable provisions, such as those regarding physical delivery of shares and sub-brokers of the Forward Market Commission, have been eliminated.
Sebi Clarifications
The notice clarifies that a stock broker registered with the Board does not require separate registration to act as a clearing member in any segment of the clearing house subject to the approval of such clearing house. Similarly, a clearing member registered with the Board does not require separate registration to act as a stockbroker in any segment of the recognized stock exchange.
To further enhance clarity, Sebi has amended a number of key definitions, including those related to clearing member, professional clearing member, proprietary trading member, proprietary trading member and designated director.
Sebi said that “proprietary trading” means trading by a stockbroker on its own account, in any segment of a recognized stock exchange, while “proprietary trading” means a stockbroker whose transactions are solely in the nature of proprietary trading.
The regulator has also amended and introduced provisions aimed at facilitating compliance and improving ease of doing business, such as allowing joint inspections and allowing accounting to be kept in electronic form.
“The Board of Directors, together with the recognized stock exchange, clearing house or custodian, may conduct a joint inspection of the stock brokers in such manner as may be specified. Every stock broker shall communicate the place of maintenance of accounts, records and documents to a recognized stock exchange of which he is a member,” Sebi said.
The regulator has also rationalized the criteria for identifying qualified stockbrokers, bringing entities with a large number of active clients or higher trading volumes under stricter supervision and compliance requirements.
Reflecting the stock exchanges’ role as first-line regulators, Sebi has revised reporting requirements, including reporting of non-compliance, filing of financial statements and disclosure of where accounts are maintained.
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