Sebi proposes simplification, ease of compliance for stock exchanges
Apart from specifying timelines for the submission of auditor certificates, the regulator has also proposed clarity on market-making guidelines in the cash market segment
 "Sebi proposes simplification, ease of compliance for stock exchanges")
The Securities and Exchange Board of India (Sebi) on Friday proposed measures to ease doing business and compliance for stock exchanges, as part of a review of its master circulars. The market regulator has proposed merging multiple overlapping provisions, removing obsolete rules, and tabulating complex requirements — such as circuit breakers, price bands and IPO trading norms — for greater clarity.
The proposals, floated through a consultation paper, follow announcements made by the Finance Minister in the Budget for FY23-24 on simplifying and reducing compliance for participants in the financial sector.
Key proposals include streamlining bulk and block deal disclosures by merging requirements and disseminating information at the PAN level, simplifying market-wide circuit breaker norms, and consolidating dynamic price band provisions. The regulator has also proposed raising the minimum net worth requirement for stockbrokers offering margin trading facilities to Rs 5 crore or higher from the current requirement of Rs 3 crore, with flexibility for exchanges to revise the threshold.
Apart from specifying timelines for the submission of auditor certificates, the regulator has also proposed clarity on market-making guidelines in the cash market segment.
Additionally, on liquidity enhancement schemes (LES), the regulator has proposed merging certain provisions for commodity derivatives with those for the equity cash and equity derivatives segments.
“Aligning the introduction, implementation and monitoring of market-making schemes and other similar schemes with LES will result in a consistent, principle-based approach across the different types of schemes that affect liquidity in a scrip or at the exchange overall,” the 40-page discussion paper noted.
Sebi has also proposed wide-ranging updates to provisions on the modification and use of unique client codes (UCC) and penalties for related non-compliance — which may provide relief to brokers and foreign portfolio investors (FPIs).