Stock brokers barred from distributing third-party lending products: NSE

The National Stock Exchange said stock brokers cannot distribute home, personal or vehicle loans, even if they are registered as research analysts, citing Sebi rules

Stock brokers are not permitted to distribute third-party lending products such as home loans, personal loans, vehicle loans, or education loans, even if they are registered as research analysts, the National Stock Exchange (NSE) clarified on Monday.

 

“It has been observed that the trading members, who are also registered as research analysts, are carrying out distribution of banking products related to various types of loans,” noted NSE.

 

The exchange cited recent FAQs released by the Securities and Exchange Board of India (Sebi) in July 2025, which allow research analysts to distribute non-Sebi-regulated products, such as banking products, only at a family or group level. However, the NSE emphasised that this relaxation does not extend to stock brokers, even if they hold dual registration as research analysts.

 

The clarification comes in reference to an earlier NSE circular issued in June 2025, which  restricts brokers only to those lending products that are explicitly permitted by Sebi, such as Margin Trading Facility (MTF) and T+1+5 funding.

 

According to the NSE, stock brokers must strictly comply with the exchange’s framework governing the distribution of third-party products. Any engagement in  unauthorised lending activities would be considered a violation of exchange guidelines.