Mumbai: The Securities and Exchange Board of India (Sebi) plans to revise the 30-year-old regulations governing the registration, conduct, and responsibilities of stockbrokers and sub-brokers in India by December, according to chairperson Tuhin Kanta Pandey.
The Securities and Exchange Board of India (Stock Brokers) Regulations, 1992, ensure fair trading, investor protection, and transparency.
“We want to change it (the regulations) as soon as possible, maybe by December. So, this stock brokers regulation will become 2025,” said Pandey on the sidelines of a conference organized by Morningstar on Tuesday.
In an August consultation paper, the market regulator proposed revising the regulations to simplify compliance and align the rules with today’s tech-driven markets. The recommendations aim to consolidate several years of Sebi circulars into the main regulations and align its provisions with newer legislations such as the Companies Act, 2013.
In its paper, Sebi had included formal definitions for major participants and activities—such as algorithmic trading, execution-only platforms for direct mutual fund investments, and proprietary trading—to ensure the regulations remain technology-neutral and adaptable to evolving market practices.
He also addressed the technical outage at the Multi Commodity Exchange (MCX), which disrupted trading activity last week. “It is not right that such problems keep coming. But only after proper analysis, we will be able to say something. We will follow the standard operating procedure,” Pandey said.
MCX, the country’s largest commodity bourse, faced a technical glitch last week that coincided with the expiry of silver monthly options contracts, sending investors into a frenzy. Trading resumed more than four hours after the scheduled opening at 9am on Tuesday.
The bourse may face a penalty of ₹25 crore due to the glitch, as per SEBI circulars. The exchange had to submit a preliminary root-cause analysis report within 24 hours of the incident and a comprehensive report within 21 days.
The Sebi chief’s remarks come amid growing concerns over the operational resilience of market infrastructure institutions as exchanges and intermediaries increasingly rely on complex technology systems and third-party service providers.
Managing risks
The chairperson also highlighted the regulator’s focus on managing emerging risks and strengthening governance frameworks across the financial ecosystem.
Pandey noted that third-party and outsourcing risks have increased with greater reliance on technology vendors and service providers, creating the need for stronger oversight and due diligence to ensure that critical market functions remain secure and resilient.
Addressing the growing prevalence of algorithmic and high-frequency trading, Pandey emphasized their role in enhancing market efficiency but cautioned that they demand “robust risk controls, real-time monitoring, and stronger compliance safeguards”.
He urged intermediaries to build operational resilience, emphasizing that preparedness and adaptability are crucial in an era of rapid digital transformation and market volatility.
Sebi is also mindful of challenges faced by long-term investors holding legacy physical securities, said Pandey.
To address this, the regulator allowed investors who purchased physical shares prior to FY20, but could not lodge transfers earlier, to complete those transfers and have the securities registered in their names.
“This measure will provide long-awaited relief to physical shareholders,” Pandey said, adding that each of these initiatives aimed at simplifying compliance, rationalizing regulation, and easing investor access to make India’s markets more efficient, transparent, and inclusive.
