Sebi is considering relaxations in reporting requirements for stockbrokers

To facilitate ease of doing business, markets regulator Sebi on Friday proposed additional relaxations in reporting norms for stock brokers, including exempting certain demat accounts of brokers who are also primary dealers from tagging requirements.Further, brokers who are banks or primary dealers will be required to report only those bank accounts used for stock broking activities, Sebi proposed.

“All demat accounts maintained by stockbrokers shall be suitably tagged. Further, this shall not apply to the demat accounts used solely for non-stockbroking activities by stockbrokers, who are also primary dealers.“Securities broker who is also a bank or primary dealer will have to report to the stock exchanges only those bank accounts which are used for their stock brokerage activities,” Sebi said in its draft circular.

As per the current rules, brokers are required to maintain bank and demat accounts with proper names and tags and report the opening and closing of such accounts to the stock exchanges. Certain exemptions were previously granted to brokers who are banks.

In its draft circular inviting public comments on proposed relaxations, Sebi suggested that the earlier requirement regarding reporting of certain demat accounts by brokers has been removed.

Instead, depositories will share details of demat accounts opened or closed by stockbrokers directly with the concerned stock exchanges, under a mechanism jointly decided by them. Stockbrokers must continue to ensure that all new bank and demat accounts are properly named as per the prescribed nomenclature.

Details of newly opened bank accounts must be reported to the stock exchanges within a week of opening, and closures must also be reported within a week.

The Securities and Exchange Board of India (Sebi) has sought public comments on the proposals till March 6.