SEBI vide Circular MIRSD/ DR-1/ Cir- 16 /09 dated November 06, 2009 has decided to allow SEBI registered stock brokers (including trading members) of stock exchanges to provide access to clients through authorised persons. This decision by the regulator was based on the recommendations made by the Secondary Market Advisory Committee of SEBI and discussions with major stock exchanges. It aims at expanding the reach of the markets for exchange traded products.
‘Authorised Persons’ under the SEBI framework
Any person (individual, partnership firm, LLP or body corporate) subject to the eligibilty criteria specifed by the SEBI can be appointed by a stock broker as an authorised person. A stock broker can appoint one or more authorised person(s) after obtaining specific prior approval from the stock exchange concerned for each such person. The approval as well as the appointment shall be for specific segment of the exchange. SEBI also clearly states that the stockbroker will be responsible for all acts of omission and commission of the authorised person. The authorised person should have the necessary infrastructure such as adequate office space, the necessary equipment and manpower to effectively discharge the activities on behalf of the stock broker.
‘Sub-Broker’ and ‘Authorised Persons’ compared
A sub-broker of the main broker has to get registered with SEBI, while the authorised person appointed by the stockbroker has to just get a prior approval of the stock exchange to provide trading access to the clients. This provision would cut for brokers to enter the broking business as, unlike sub-brokers, authorised persons would only need approval of the stock exchange and would not have to wait for SEBI approval. It takes a sub-broker between four weeks and two months to get registered with SEBI, said a compliance officer with a broking firm.
Posts
No comments:
Post a Comment