SEBI rationalises procedure for de-registration of sub-brokers
MDT/PTI 28 August 2012

From now onwards, the affiliated stock broker has to issue a public advertisement in a local newspaper located at the sub-broker's place of work to publicly inform his/her registration

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has asked stock brokers to make a public announcement whenever any of their sub brokers surrender their registration, reports PTI.

 

The market regulator's directive is part of a decision to rationalise the surrender of registration by sub-brokers, given their present role, where they are not permitted to deal with funds and securities of the investors.

 

In a circular, SEBI said the decision has been taken in consultation with the major stock exchanges and stock brokers' associations.

 

From now onwards, the affiliated stock broker has to issue a public advertisement in a local newspaper located at the sub-broker's place of work to publicly inform that the particular entity is surrendering the registration.

 

SEBI said the modification have been introduced to protect the interests of investors as well as to promote the development and regulation of the securities market.

 

The affiliating stock broker also has to furnish an undertaking to the stock exchanges that clients of the particular sub broker, who is to surrender the registration, is informed about the move.

 

However, in the case of transition from sub broker to Authorised Person (AP) -- where the entity surrenders registration while seeking approval as AP with the same stock broker and the same stock exchange -- there is no need to issue public advertisement.

 

Further, the stock broker and the stock exchange would have to publish the details of sub-brokers whose registration has been surrendered or their new status as AP on their respective websites for the information of the investors.

Comments
Sweena Jain
10 years ago
Who will be held liable for cheating or fraud done by AUTHORISED PERSON?
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