Measures to instill trust in securities market – Expanding the framework of Qualified Stock Brokers (QSBs) to more stock brokers

NOTICES

Notice No.		20240319-49		Notice Date		19 Mar 2024
Category		Compliance		Segment		General
Subject		Measures to instill trust in securities market - Expanding the framework of Qualified Stock Brokers (QSBs) to more stock brokers
Attachments		Annexure A.pdf ;
Content

This is with reference to SEBI Circular no. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/24 dated February 06, 2023, on "Enhanced obligations and responsibilities on Qualified Stock Brokers (QSBs)", wherein SEBI enumerated the parameters for designating certain stock brokers, having regard to their size and scale of operations, likely impact on investors and securities market, as well as governance and service standards, as Qualified Stock Brokers (QSBs). <_o3a_p>

The following four parameters were considered for designating a stock broker as QSB, on an annual basis: <_o3a_p>

1.1 the total number of active clients of the stock broker; <_o3a_p>1.2 the available total assets of clients with the stock broker; <_o3a_p>1.3 the trading volumes of the stock broker (excluding the proprietary trading volume of the stock broker); <_o3a_p>

1.4 the end of day margin obligations of all clients of a stock broker (excluding the proprietary margin obligation).<_o3a_p>

Based on the aforementioned parameters, the first list of QSBs was issued by Exchange Notice No. 20230303-66 dated March 03, 2023, on "Enhanced Obligations and Responsibilities on Qualified Stock Brokers (QSBs)." <_o3a_p>

SEBI vide Circular no. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2024/14 dated March 11, 2024, on "Measures to instill trust in securities market - Expanding the framework of Qualified Stock Brokers (QSBs) to more stock brokers" has extended the framework of QSBs to more stock brokers and enumerated the following parameters, in addition to the aforementioned four parameters: <_o3a_p>

1.5 the proprietary trading volumes of the stock broker who are engaged in clients' trading; <_o3a_p>1.6 compliance score of the stock broker, derived by assigning highest score to stock brokers with highest penalties levied across Exchanges; and <_o3a_p>

1.7 grievance redressal score of the stock broker, derived by assigning highest score to stock brokers with highest count of investor complaints received across Exchanges. <_o3a_p>

Accordingly, on the basis of the parameters defined in the aforesaid Circular, the revised list of designated Qualified Stock Brokers (QSBs) is enclosed herewith as Annexure A (list is in alphabetical order and is not indicative of ranking). <_o3a_p>

These QSBs shall be required to meet enhanced obligations and discharge additional responsibilities as specified in Comprehensive Operating Guidelines issued vide Exchange Notice No. 20230601-54 dated June 01, 2023. <_o3a_p>

The effective date of implementation for different QSBs based on parameter by which they are designated as QSBs has been prescribed in the Table below:

Parameters based on which a Stock Broker is designated as QSB<_o3a_p>	Applicability of the Circular*<_o3a_p>
Parameters mentioned at para 1.1 to 1.5 above (i.e. para 4.1.1 to 4.1.5 of the SEBI Circular dated March 11, 2024)<_o3a_p>	June 01, 2024<_o3a_p>
Parameters mentioned at para 1.6 and 1.7 above (i.e. para 4.1.6 to 4.1.7 of the SEBI Circular dated March 11, 2024)<_o3a_p>	September 01, 2024<_o3a_p>

*For QSBs which are common between the lists in Annexure A, the date of applicability of the Circular shall be June 01, 2024. <_o3a_p>

Stock Brokers designated as QSBs vide Exchange notice no. 20230303-66 dated March 3, 2023 and not included in Annexure A, shall continue to comply with the enhanced obligations and responsibilities, for an additional period of 3 financial years or such time, as may be specified by the Exchange, in consultation with SEBI.

Members are advised to take note of the contents of the Circular and ensure strict compliance.

In case of any clarifications, members may contact us on details given as under:<_o3a_p>

Contact Nos.<_o3a_p>	Email ID<_o3a_p>
022- 2272 8435/5785<_o3a_p>	[email protected]<_o3a_p>

For and on behalf of BSE Ltd.<_o3a_p>

<_o3a_p>

Richa Ghosh Kaustubh Mundada <_o3a_p>

Asst. Gen. Manager Asst. Gen. Manager <_o3a_p>

Inspection Inspection

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