Market watchdog the Securities and Exchange Board of India (Sebi) today allowed sub-brokers to carry out 'in-person' verification (IPV) of clients.
"...The subsidiaries of stock exchanges, acting as stock brokers, may rely upon the 'in-person' verification done by their sub-brokers (who are also registered with Sebi as stock brokers of the parent stock exchange) for their respective clients," the Sebi said in a circular.
However, the ultimate responsibility for 'in-person' verification would remain with the subsidiaries and they shall obtain the necessary IPV documents for their records, it added.
The subsidiaries of stock exchanges had requested Sebi to consider the 'in-person' verification carried out by their sub-brokers since they are also the stock brokers of the parent stock exchange and the subsidiaries are not permitted to register direct clients.
In July 2008, the Sebi mandated the stock brokers to carry out 'in-person' verification of their clients by their staff while registering them and also ensure that this function is not outsourced.