Stock Brokers and Depository Participants – Increased Website Compliance

SEBI has issued a circular dt: February 15, 2023, vide which SEBI has specified certain information that is required by Stock Brokers and Depository Participants to be published on its website.

This circular is effective from August 16, 2023.

The following information is required to be published on the website of a stockbroker and depository participant with effect from August 16, 2023:

  1. Basic details of the Stock Broker / Depository Participant such as registration number, registered address of Head Office, and branches, if any.
  2. Names and contact details such as email ids etc. of all key managerial personnel (KMPs) including the compliance officer.
  3. Step-by-step procedures for opening an account, filing a complaint on a designated email id, finding out the status of the complaint, etc.
  4. Details of Authorized Persons.

This information required to be displayed is in addition to information that is already required to be published by the Companies Act, 2013 (if the stock broker/depository participant is being managed under the set up of a company, SEBI (Listing Obligations and Disclosure Requirements), 2015 if the stock broker/depository participant is a listed entity and as specified BSE, SEBI or Depositories otherwise.

SEBI has further stated that the URL to the website of the stockbroker or depository participant shall be reported to the stock exchanges/ depositories within a week of this circular coming into effect.

SEBI has further stated that any modification in the URL shall be reported to stock exchanges/depositories within 3 days of such changes.

Stock Exchanges and Depositories are advised to monitor this compliance and update SEBI in a monthly report to SEBI. Further SEBI has asked to submit a compliance on implementation of this by August 31, 2023.

There have been instances where various miscreants have fakely represented themselves as SEBI registered brokers and have duped gullible investors. This move will help investors identify between fake and genuine brokers. Also, it would help investors identify the process of raising complaints in one place. Till now either investors had to call a toll free or send an email where there was no dedicated mail id. This is a welcome move whereby all relevant information can be made available in one place.

Stock Brokers and Depository Participants shall utilize this to make this their ‘USP’ to further enhance their business. If we see the websites of a few big industry players it is seen that most of the above information is available on their websites. So, it is suggested that as a good practice, all the details as sought by SEBI above shall be kept under a separate tab in such a manner that customers should not find it difficult to find it or trace it It is seen that SEBI is strengthening website disclosure across all market participants. Recently, SEBI through Stock Exchanges had advised listed entities about website compliances

Disclaimer: This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement