N O T I C E
Dated:
30th August, 2018
Trading Members are hereby informed that the Exchange
has received a Circular from SEBI Vide Ref. No. SEBI/HO/MIRSD/DoP/CIR/P/2018/117, Dated August 03, 2018 regarding Role of Sub-Broker (SB) vis-a-vis Authorized
Person (AP). The contents of the said circular are reproduced
hereunder for information of trading members.
Quote
:
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CIRCULAR
SEBI/HO/MIRSD/DoP/CIR/P/2018/117 August 03, 2018
To,
1. All Recognized Stock Exchanges
2. Stock Brokers through Recognized Stock Exchanges
3. Sub-Brokers through Recognized Stock Exchanges
Dear Sir/Madam,
Sub:
Role of Sub-Broker (SB) vis-a-vis Authorized Person (AP)
1. Under the current regulatory framework, Sub-Brokers
(‘SB’) need to seek registration from SEBI under SEBI (Stock Broker and
Sub-Broker) Regulations, 1992, and Authorized Persons (‘AP’) need to seek
registration from the concerned Exchange. There is no difference in the
operative role of a Sub-Broker and that of an Authorized Person.
2. SEBI Board in its meeting held on June 21, 2018
decided to discontinue with Sub-Broker as an intermediary to be registered with
SEBI.
3. In view of the same, the need for the category of
Sub-Broker as a market intermediary may no longer be required. Therefore, it is
decided that-
a) No fresh registration
shall be granted to any person as Sub-Broker. Any pending applications for
registration as Sub-Brokers under process, shall be returned to the concerned
Stock Exchanges for onward transmission to the applicant.
b) The registered
Sub-Brokers shall have time till March 31, 2019 in order to migrate to act as
an AP and / or Trading Member (TM). The Sub-Brokers, who do not choose to
migrate into AP and /or TM, shall deemed to have
surrendered their registration with SEBI as Sub-Broker, w.e.f.
March 31, 2019.
c) Consequent upon
migration / deemed surrender, the certificate of registration granted to the
Sub-Brokers by SEBI shall stand withdrawn.
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d) The migration path for existing registered Sub-Brokers,
shall be as under:
i. In case of a
registered Sub-Broker who is already approved to act as AP in Derivatives
Segment of the Exchanges, he shall be registered with the Exchange to continue
activities of Sub-Broker as an AP in Cash Segment.
ii. In case of a
registered Sub-Broker who is not approved by Stock Exchanges to act as AP in
Derivatives Segment, Exchanges shall register them as AP in Cash Segment, to
continue their operations without disruption.
iii. The existing
Sub-Broker has an option to become a Trading Member, if the Sub-Broker meets
the eligibility criteria prescribed under Stock Exchange Bye-laws and SEBI
Regulations and by complying with these Regulations.
e) All the existing Sub-Brokers
shall be required to pay renewal fees to SEBI up to financial year 2018-19; and
renewal fees paid by Sub-Broker for the financial years beyond 2018-19 shall be
refunded on receipt of recommendation from respective Stock Exchange.
f) The Stock Exchanges
shall put in place appropriate process for surrender or migration of Sub-Broker
to AP / TM.
4. The Stock Exchanges
are directed to:
a) bring
the provisions of this circular to the notice of the Stock Brokers and
Sub-Brokers, and also disseminate the same on their websites;
b) make
amendments to the relevant bye-laws, rules and regulations for the implementation
of the above decision in co-ordination with one another, as considered
necessary;
c) monitor
the compliance of this circular;
d) communicate
to SEBI, the status of the implementation of the provisions of this circular.
5. This circular is issued in exercise of powers conferred
under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to
protect the interest of investors in securities and to promote the development
of and to regulate the securities market.
Yours faithfully,
D
Rajesh Kumar
General
Manager
Unquote: -
Trading Members are requested to take note of the
aforesaid guidelines of SEBI and act accordingly.
Dhiraj
Chakraboty
Deputy
General Manager
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