No More Multi-Exchange Mayhem—SEBI Plans Single-Window Compliance for Brokers

Image Source: India IPO

India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), is working on a major overhaul of its enforcement and compliance framework. In a move aimed at reducing the regulatory burden on brokerage firms, SEBI is developing a “one event, one penalty” system and a common reporting platform across stock exchanges. The initiative is part of SEBI’s broader push to enhance transparency, reduce duplication, and improve the ease of doing business in India’s financial markets.

What’s Changing?

One Penalty per Violation: Currently, brokers can be fined separately by multiple exchanges for the same regulatory lapse. SEBI’s new framework would ensure that only one designated exchange imposes a penalty for a given violation.

Unified Reporting System: SEBI is also working on a centralized compliance portal where brokers can file regulatory documents once, instead of submitting them to each exchange individually.

Designated Exchange Model: This model, already used for administrative oversight, may be expanded to include penalty enforcement, reducing ambiguity and overlap.

Why It Matters

Brokers have long complained about excessive and overlapping penalties, sometimes reaching ₹40 lakh for technical or interpretational issues.
The new system would streamline compliance, reduce litigation, and encourage greater participation in capital markets.
It aligns with SEBI’s broader goals of regulatory simplification, especially as trading volumes and retail participation continue to surge.

Industry Reaction

Market participants have welcomed the move, calling it a “long-overdue reform” that will bring fairness and clarity to the compliance process.

“This will help brokers focus more on investor service and less on navigating a maze of penalties,” said a senior compliance officer at a leading brokerage.

Sources: CNBC TV18, ET LegalWorld, SEBI