“A stock broker may carry out an activity under the regulatory framework of the other financial sector regulator or any other specified authority in the manner as may be specified by the Board,” the notification said.
Stock brokers and clearing members will now be regulated by Sebi (Stock Brokers) Regulations 2026 (SB Regulation) which has now replaced Sebi’s (Stock Brokers) Regulations 1992.
The new rules encompass simplified regulatory language, remove outdated provisions, and introduce clearer definitions. The move is aimed at modernising the regulatory architecture in line with evolving market practices while making compliance simpler and more transparent for market intermediaries.
Sebi approved the proposal to overhaul the regulatory framework governing stock brokers on December 17, clearing the way for the new rules.
The SB Regulations have been structured into eleven chapters, comprehensively covering key aspects of the regulatory regime for stockbrokers.The regulations have been simplified and condensed, cutting pages from 59 to 24, and the word count has been reduced.The market regulator had earlier said the word count will reduce from 18,846 words to 9,073 words.
As part of the revamp, Sebi deleted certain schedules that are no longer required and integrated relevant ones directly into the regulations as chapters to improve readability and understanding.
For instance, historical and non-applicable provisions—such as those related to physical share delivery and Forward Market Commission sub-brokers—have been eliminated.
Sebi clarifications
The notification clarifies that a stock broker registered with the Board does not need a separate registration to act as a clearing member in any segment of the clearing corporation subject to the approval of such clearing corporation. Likewise, a clearing member registered with the Board will not need a separate registration to act as a stock broker in any segment of the recognised stock exchange.
To further enhance clarity, Sebi has amended several key definitions, including those relating to clearing member, professional clearing member, proprietary trading member, proprietary trading, and designated director.
Sebi said that “proprietary trading” means trading by a stockbroker in its own account, in any segment of a recognised stock exchange, while “proprietary trading member” means a stockbroker whose trades are exclusively in the nature of proprietary trading.
The regulator has also modified and introduced provisions aimed at easing compliance and improving ease of doing business, such as allowing joint inspections and permitting the maintenance of books of accounts in electronic form.
“The Board, along with the recognised stock exchange, clearing corporation or depository, may conduct a joint inspection of the stock brokers in the manner as may be specified… Every stockbroker shall intimate the place of maintenance of books of account, records, and documents to a recognised stock exchange of which it is a member,” Sebi said.
Also, the regulator has rationalised the criteria for identifying qualified stockbrokers, ensuring that entities with a large number of active clients or higher trading volumes are brought under enhanced supervision and compliance requirements.
Reflecting the role of stock exchanges as the first-line regulators, Sebi has revised reporting obligations, including the reporting of non-compliance, submission of financial statements, and intimation of the place where books of accounts are maintained.
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