Direct market access in exchanges will pose higher systemic risk: Brokers

Experts say playing various functions of an intermediary may not be feasible for exchanges

Domestic brokerages say giving direct market access (DMA) to clients and allowing them to directly trade on the exchanges could lead to significantly higher systemic risks.

Since the buzz on DMA floated on the Street this week, share price of the listed brokerage ICICI Securities is down over 15 per cent. Geojit Financial Services is down over 7 per cent, while IIFL Securities and discount broker 5Paisa Capital are down 7.4 per cent and over 18 per cent, respectively.

“If there is a client default, the onus is on the brokerage firm and not on the exchange. If exchanges, as one large