NEW DELHI — India’s market regulator has overhauled its stockbroker regulations for the first time in more than three decades, replacing the 1992 framework with the new Sebi (Stock Brokers) Regulations, 2026, in a move aimed at simplifying compliance and improving ease of doing business.
The Securities and Exchange Board of India said the updated rules are intended to bring greater clarity, remove outdated provisions, and modernize the regulatory structure governing stockbrokers.
Under the new framework, stockbrokers will be allowed to undertake activities regulated by other financial authorities, provided they comply with the rules prescribed by those regulators. SEBI said such activities will be governed by the relevant financial sector regulator rather than the market watchdog.
The regulator has rewritten the rules in simpler language and reorganized them into 11 chapters covering all major aspects of stockbroking. Several old schedules have been deleted, with relevant provisions incorporated directly into the main body of the regulations to make them easier to read and understand.
SEBI has also removed repetitive sections and streamlined rules related to underwriting, codes of conduct, and other permitted activities. Key definitions have been updated, including those for clearing members, professional clearing members, proprietary trading members, and designated directors.
The regulator clarified that proprietary trading refers to trading carried out by a stockbroker on its own account, while a proprietary trading member is a broker that trades exclusively on its own behalf.
To reduce the compliance burden, SEBI has allowed joint inspections involving the regulator along with stock exchanges, clearing corporations, or depositories. Stockbrokers will also be permitted to maintain their books of accounts in electronic form, though they must inform the stock exchange about the location where these records are stored.
SEBI has also revised the criteria for identifying qualified stockbrokers, with firms that have a large number of active clients or high trading volumes now subject to closer supervision and more stringent compliance requirements. (Source: IANS)
