Sebi reduces approval time to 7 days for brokers for internet-based trading

Markets regulator Sebi on Thursday significantly reduced the time taken by stock exchanges for granting approval to stock brokers for internet-based trading to seven days from the current 30 days.

The move is aimed at facilitating ease of doing business.

Under the rule, the broker is required to apply to the respective stock exchange for a formal permission to provide internet-based trading service.

Further, the stock exchange, which was required to communicate its decision to the member within 30 calendar days, will now have to do so within 7 days, the Securities and Exchange Board of India (Sebi) said in its circular.

The internet trading can take place through order routing systems, which will route client orders to exchange trading systems for execution. Thus a client sitting in any part of the country can trade using the internet as a medium through brokers' internet trading systems.

Additionally, the regulator has abolished the existing requirement of periodic confirmation of internet-based trading (IBT) statistics by stock brokers before they are published by stock exchanges.

Instead, exchanges would publish IBT statistics on the basis of details of IBT terminals provided by stock brokers. Further, exchanges, in this regard, can obtain information/declaration about IBT terminals from stock brokers as deemed fit by them.

The decision has been taken after Sebi received requests pertaining to internet-based trading from the Industry Standard Forum (ISF) of stock brokers.

The new guidelines will be applicable with immediate effect, Sebi said.