VSSL can appoint sub-broker as director: Sebi

Sebi has informed VSE Stock Services Ltd (VSSL), a subsidiary of Vadodara Stock Exchange, that it can appoint an individual sub-broker registered with it on the board of directors.
The clarification has been provided since Sebi rules do not allow "a director of the stock broker to act as sub-broker to the same stock broker".
In an informal guidance letter to VSSL, the capital market regulator said that such rules are not applicable to registered stock brokers which are subsidiaries of regional stock exchanges.
"Partners/directors of a sub-broker, affiliated to stock brokers who are subsidiaries of regional stock exchanges can be appointed as directors on the board of the said stock broker," Sebi said.

According to Sebi, such brokers can appoint their sub-brokers as directors as long as they remain an arm of a regional stock exchange.
As per the present practice of appointment of directors to the governing board, VSSL has appointed one of its individual sub-brokers as its director, the letter said.