Equity and commodity futures market brokers have approached markets regulator Securities and Exchange Board of India (Sebi) over opening of their offices. While exchanges are open on Monday, brokers in the major tier-2 cities and trading hubs like Indore are stuck as police don't allow them to open their own offices due to country-wide lockdown amid coronavirus (Covid-19) scare.
State governments like Maharashtra, Gujarat and Rajasthan have already declared exchange industry services under essential category. Hence, opening of offices in these three states should not be a problem.
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In a letter addressed to Sebi chairman Ajay Tyagi, brokers' association Anmi (Association of National Exchanges Members of India) has urged to explicitly declare brokers under essential services to enable them to work smoothly.
In Mumbai, clarifications were issued to authorities to exclude employees working in exchanges, broking offices from lockdown. No such clarifications or guidelines are being issued by other state governments.
"All financial markets are integrated globally and India is playing a major part standing among the top 7 ranks globally in equity volumes. Hence equity and derivatives markets cannot be shut down while global exchanges/financial markets are active and working around the world. In this regard, Sebi/exchanges have permitted vide their circulars trading via terminals from various locations," said V Raghavendra Prasad, Chief Executive Officer, Anmi.
He added that this relaxation is taking care of front office staff of broking offices to work from home to 50 per cent of potential, however, staff serving back offices/servers/operational dependencies cannot be operated working from home. Thus, it is imperative to declare capital markets/stock broking services as essential services exempted from the lockdown.
"In view of the above, Anmi submits to your good offices to immediately issue a clarification to include “Stock Brokers and depository participants” as essential Services and advise all State Governments to issue clarification in this regard. Anmi request you to take a balanced view and decide on the future course of action," said Prasad.