New Delhi, February 13 To promote ease of doing business, the markets regulator, Sebi, on Friday proposed additional relaxations to reporting norms for stock brokers, including exempting certain demat accounts held by brokers who are also primary dealers from tagging requirements.
Furthermore, brokers that are banks or primary dealers will be required to report only those bank accounts that are used for stock broking activities, Sebi proposed.
"All demat accounts maintained by stock brokers should be appropriately tagged. Furthermore, this shall not apply to the demat accounts which are used exclusively for activities other than stock broking activities by stock brokers, who are also primary dealers."
"Stock brokers who are also banks or primary dealers will be required to report only those bank accounts that are used for their stock broking activities," Sebi said in its draft circular.
Under the current rules, brokers are required to maintain properly named and tagged bank and demat accounts and report the opening and closure of such accounts to stock exchanges. Certain exemptions were earlier provided to brokers that 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 deleted.
Instead, depositories will share details of demat accounts opened or closed by stock brokers directly with the concerned stock exchanges, as per a mechanism jointly decided by them.
Stock brokers should continue to ensure that all new bank and demat accounts are appropriately named as per the prescribed nomenclature.
Details of newly opened bank accounts should be reported to stock exchanges within one week of opening, and closures must also be reported within one week.
The Securities and Exchange Board of India (Sebi) has sought public comment until March 6 on the proposals.