Finance Ministry Rings the Bell: EODB New Rules Set to Supercharge Stock Brokers’ Business

In a major step towards facilitating improvement in ease of doing business (EODB) for brokers in stock exchanges, the Finance Ministry has come out with major changes in regulatory guidelines that dictate broker operations. The new regulations, notified on Sunday, relax compliance norms for brokers and clarify restrictions on business operations of brokers.

 

Under the new paradigm, brokers are specifically barred from becoming a principal or employee of any other enterprise except securities or commodity derivatives business subject to the approval of the Securities Contracts (Regulation) Rules (SCRR). This is aimed at minimizing regulatory uncertainty and keeping brokers focused on their core business so as to improve market integrity.

 

The amendments also tighten the conditions for people who want to join qualified stock exchanges, with the aim of enhancing the transparency and efficiency of the market. Industry experts are of the view that the steps will not only cut red tape but also encourage more participation and competition in the industry.

 

Market players greeted the action as a move in the right direction towards streamlining India's capital markets and embracing adherence to international best practices. The action taken by the Finance Ministry is also likely to support investor confidence and aid the growth of the financial sector.

 

Source: Moneycontrol