India’s securities regulator, SEBI, is looking to combine many scattered trading rules into one clear handbook, hoping to make life easier for brokers and investors.
Why a single rulebook?
Right now, trading rules for equities, commodities, price bands, circuit breakers, bulk deals and more are spread across several documents. SEBI says this creates unnecessary paperwork and confusion.
Main changes in the draft
- Combine overlapping rules: All provisions on trading, price limits, bulk/block deals, call auctions, margin trading, client codes and PAN requirements will be merged into one circular that applies to both equity and commodity markets.
- Separate clearing‑house rules: Guidelines that only affect clearing corporations will move to a dedicated master circular.
- Bulk and block deal reporting: Disclosures will shift from the unique client code (UCC) level to the client’s PAN, reducing manual reporting for brokers.
- Clearer presentation: Market‑wide circuit‑breaker rules, dynamic price bands and IPO price bands will be shown in easy‑to‑read tables.
- Higher broker net‑worth requirement: The minimum net worth for brokers may rise from ₹3 crore to at least ₹5 crore, as decided by each exchange.
- Aligned filing timelines: Deadlines for net‑worth and auditor certificates will match regular financial reporting cycles.
- Streamlined liquidity rules: Old cash‑segment market‑making provisions will be removed and replaced with a principle‑based Liquidity Enhancement Scheme covering all segments.
- Unified trading hours: Hours for equities, derivatives, commodities, currencies, and newer platforms like the Social Stock Exchange will be listed together.
- More flexible client code changes: Genuine corrections will be easier, multiple PAN‑linked UCCs will be allowed for certain clients, and waiver reporting will shift to a monthly basis.
- Harmonised penalties: Fines for exchanges and clearing corporations will be aligned.
- Short‑selling and securities lending: Rules will be clarified, with daily disclosures required and responsibilities clearly divided.
- Commodity‑specific disclosures: Requirements on hedger delivery intent, open‑interest data and risk disclosures will be added to the unified circular.
- UPI‑based trading updates: Rules for blocked amounts in secondary‑market trades will be refreshed, while settlement details move to the clearing‑house circular.
What will be removed?
SEBI proposes to scrap outdated clauses such as negotiated‑deal exemptions, specific debt‑segment guidelines, certain forward‑contract rules in commodities, and unnecessary reporting requirements.
How can you give feedback?
The regulator has opened a public consultation. Anyone can submit comments on the draft until January 30. Your input could shape the final rules.
Bottom line for investors
A single, simplified rulebook should lower compliance costs for brokers, potentially leading to smoother trading experiences and clearer market information for investors.
Remember, this is perspective, not a prediction. Do your own research and consider your personal circumstances before making any investment decisions.