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Sebi enhances supervision of stockbrokers, members

The market regulator has stepped up supervision of stockbrokers to check fund diversion

Shrimi Choudhary  |  Mumbai 

The logo of the Securities and Exchange Board of India (SEBI) is pictured on the premises of its headquarters in Mumbai (Photo: Reuters)
The logo of the Securities and Exchange Board of India (SEBI) is pictured on the premises of its headquarters in Mumbai (Photo: Reuters)

The Securities and Exchange Board of India (Sebi) has stepped up of to check fund diversion.

The regulator on Monday outlined the criteria for annual inspection of and of clearing corporations. The move is part of Sebi’s efforts to move towards a risk-based model of of all

According to Sebi, the top 25 in terms of investor complaints and arbitration cases filed by investors would face inspection, irrespective of whether they have been inspected earlier or not. Those with adverse observations in the internal audit reports on high-risk issues such as wrong reporting of margins, transfer of trades, pledging of client securities and dealing with unregistered intermediaries would also be inspected. 

“Clearing activity undertaken by for other shall be inspected by clearing corporations. Other activities of shall be inspected by stock exchanges. If stock exchanges and clearing corporations so desire, they can conduct joint inspections of stockbrokers,” said in a circular on Monday. 
 
Inspection of can be done on a random basis. Those not falling understated criteria would be examined at least once in three years, said. 

These apart, the regulator has asked exchanges to frame an internal policy for selection of for inspection based on inputs/alerts from risk-based Besides, subsidiaries of regional stock exchanges would also have to face inspection every year.

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