Winning Bizness Desk
Mumbai - The Securities and Exchange Board of India (SEBI) has tightened the noose on stock brokers who commit irregularities in the stock market. According to experts, for the first time SEBI has taken strict steps to rein in stock brokers, which will have a very good effect in the future. According to the new rule notified by SEBI, brokers and their company will be responsible if there is any kind of irregularity in the market. According to the notification issued by SEBI, the brokerage firm as well as its senior officials will be responsible for detecting and preventing misuse of the market and fraud. For this, the brokerage company will have to establish a strong monitoring and control system. Also, a system of proper increase and reporting of deals will be made for stock brokers.
What Sebi chief has to say?
"I urge the association to bring forth to the regulator any instances of mischief in the market that are going on, so that the regulator can take early action and not wait until it explodes in the system and then we have to come back with a heavy hand," SEBI chairperson Madhvi Puri Buch said in an event. According to sources associated with SEBI, the regulator has told the possible examples of market fraud. The brokers system has been told to take measures to monitor this. Possible cases may include creating a misleading image of the deal, price manipulation, front running trading, mis-selling and unauthorized deals. The stock broker has to inform the markets within 48 hours of detection of any suspicious activity. They have to submit an analysis and action report on cases of suspicious activity, fraud and market abuse or a zero report on a half-yearly basis if there is no such incident.
The stock broking company has to establish and implement a whistleblower policy for employees and other stakeholders regarding suspected fraud and improper activities. The policy should establish procedures to ensure adequate protection of the whistleblower. SEBI has now reduced the face value of debt securities to Rs 10,000 to attract retail investors. Earlier it was Rs 1 lakh. In October 2022, its face value was reduced from Rs 10 lakh to Rs 1 lakh.
