SEBI issues guidelines on one-time registration process

Sebi on Mon­day issued guide­lines to stock exchanges and clear­ing hous­es that require them to share infor­ma­tion about their mem­bers, among oth­ers, as part of stream­lin­ing the reg­is­tra­tion process for mar­ket entities.

The Secu­ri­ties and Exchange Board of India (Sebi) had recent­ly noti­fied new norms that require stock bro­kers and clear­ing enti­ties to have one-time sin­gle reg­is­tra­tion cer­tifi­cate to oper­ate across dif­fer­ent bourses.

In a cir­cu­lar today, the mar­ket reg­u­la­tor has issued guide­lines for bours­es and clear­ing cor­po­ra­tions for pur­pose of “imple­ment­ing the revised reg­is­tra­tion requirements”.

As part of the guide­lines, among oth­ers, the cap­i­tal mar­ket watch­dog has asked the stock exchanges and clear­ing cor­po­ra­tions to “coor­di­nate and share infor­ma­tion with one anoth­er, about their members”.

Fur­ther, the guide­lines for the bours­es and clear­ing hous­es per­tain to reg­is­tra­tion process required in case of new mar­ket enti­ties as well as exist­ing ones.

A new enti­ty seek­ing to act as a stock bro­ker or clear­ing mem­ber is required to apply to Sebi through the respec­tive stock exchange or clear­ing cor­po­ra­tion in the man­ner pre­scribed in the bro­ker reg­u­la­tions, the reg­u­la­tor said.

“The enti­ty shall be issued one cer­tifi­cate of reg­is­tra­tion, irre­spec­tive of the stock exchange(s)/clearing corporation(s) or num­ber of segment(s),” Sebi said.

Mean­while, an enti­ty already reg­is­tered with Sebi can direct­ly apply for approval to the con­cerned exchange or clear­ing cor­po­ra­tion. In such cas­es, Sebi has to be informed about such grant of approval.

Accord­ing to the reg­u­la­tor the enti­ties would con­tin­ue to pay fees for each seg­ment approved by the stock exchange or clear­ing cor­po­ra­tion, as prac­tised currently.

Fur­ther, Sebi has asked exchanges as well as clear­ing cor­po­ra­tion to grant approval to Sebi reg­is­tered enti­ties for oper­at­ing in any seg­ment “after exer­cis­ing due dili­gence and on being sat­is­fied about the com­pli­ance of all rel­e­vant eli­gi­bil­i­ty requirements”.

They would have to ensure that the appli­cant, its direc­tors, pro­pri­etor, part­ners and asso­ciates sat­is­fy the ‘Fit and Prop­er Cri­te­ria’, have tak­en sat­is­fac­to­ry cor­rec­tive steps to rec­ti­fy the defi­cien­cies or irreg­u­lar­i­ties observed in the past and all pend­ing dues have been recovered.

Among oth­ers, the bours­es or clear­ing cor­po­ra­tion may also car­ry out inspec­tion, wher­ev­er con­sid­ered appropriate.

Sebi has direct­ed the exchanges and clear­ing hous­es to bring these guide­lines to the notice of their mem­bers as well as com­mu­ni­cate to the reg­u­la­tor about the sta­tus of the imple­men­ta­tion of these guide­lines through month­ly devel­op­ment report.