Sebi wants to simplify guidelines for intermediaries

MUMBAI: The Securities and Exchange Board of India (Sebi) has proposed to consolidate the common requirements under the provisions and code of conduct to regulate intermediaries. This is part of the market regulator’s attempts to iron out the overlap and common factors in many requirements and obligations for the intermediaries.

Inviting public comments, Sebi said, in a six-page draft, said: “The new regulations will make the registration process of persons as intermediaries/ specified entities less burdensome and cost-effective without diluting the regulatory requirements.” The draft paper touches up on the legalities involved in the processes of registration, its renewal and annual fee among others.

The draft paper said: “It has been observed that every regulation seeking to regulate an intermediary incorporates some basic provisions regarding registration, general obligations, inspection and investigation, default, etc. “ “In addition to the above, the general requirements of the Code of Conduct provided in almost all the regulations are also similar in nature. Except for the clauses relating to the specific requirements of, and particular concerns in, each category, the content of all the regulations is common either in language or in spirit, if not in both.” it added.

The draft proposes that entities which are currently registered with Sebi under regulations which grant perpetual registration shall be required to apply for a fresh registration under the new framework within two years of notification of the proposed regulations.

The market regulator has also proposed to do away with the current requirement that persons have to submit different application forms if they desire to register as an intermediary in more than one category. Instead, only one detailed application form will have to be submitted..

However, the regulator is aiming to make all intermediaries pay annual fees, which is not the current norm. In the current framework only four intermediaries namely custodians of securities, depositories, depository participants and mutual funds are required to file disclosures annually and pay an annual fee, the draft said.

Sebi wants each intermediary to prominently display the name and contact details of the compliance officer to whom complaint may be made in the event of any investor grievance.