SEBI Update - Measures to instil confidence in securities market – Brokers’ Institutional mechanism for prevention and detection of fraud or market abuse

It has been decided that stock brokers shall comply with the following obligations / mechanisms as laid down in Chapter IVA of the Broker Regulations:

Systems for surveillance of trading activities and internal controls Obligations of the stock broker and its employees Escalation and reporting mechanisms Whistle Blower Policy

The standards for implementation of the same including operational modalities shall be formulated by the Broker’s Industry Standards Forum (ISF), in consultation with SEBI.

Applicability: The provisions of this circular shall come into force in a risk-based, staggered manner to ensure smooth adoption and effective implementation for all the stock brokers by providing enough time for stock brokers, based on their size, for making necessary changes.

The effective date for implementation for different stock brokers has been prescribed in the table below

Number of active UCCs* of stockbroker Applicability of Operational / working Modalities & Guidance Note > 50,000 January 01, 2025 2,001 to 50,000 April 01, 2025 upto 2,000 April 01, 2026

as on last day of the preceding month of the date of issuance of the circular

Link - View Circular