In a move having far reaching implications, the Securities and Exchange Board of India (Sebi) has, for the first time, decided to entrust the stock exchanges (SEs) with the responsibility of registration of sub-brokers. The decision to this effect was taken at the last board meeting of the regulator held in Mumbai on March 20.
The regulator, however, will continue to monitor the registration process and retain the final authority of according the approval as it will have electronic connectivity with the bourses in this aspect.
The Sebi decision, according to market participants, is a practical one as it will speed up the registration process of sub-brokers, which currently takes anywhere between six to nine months. The reason for the delay on the part of Sebi was lack of manpower and other infrastructural and technical problems. This delay use to create hurdles in the expansion plans of the brokerage houses and in the current bull run no one wants to miss the bus.
In the new set up, the application for registration is expected to be cleared within a fortnight and this could prove to be a great boost for the sub-brokers, as they will be able to launch their operations almost instantly, said market observers.
The number of applications pending with Sebi for the registration of sub-brokers run into thousands. As per rough estimates, the number of pending applications of two major SEs —the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE)— is more than 5,000 and this does not include the applications of sub-brokers affiliated with the Regional Stock Exchanges (RSEs).
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