Sebi Relaxes Glitch Reporting for Brokers Below 10,000 Clients
Overview
India's Securities and Exchange Board of India (Sebi) has simplified technical glitch reporting rules for stockbrokers. Firms with fewer than 10,000 clients are now exempt, while others benefit from a doubled reporting window and clarified exemptions for non-disruptive or external system failures. The regulator also revised its financial disincentive structure.
Sebi Amends Glitch Reporting Norms
MUMBAI – The Securities and Exchange Board of India (Sebi) announced on Friday a significant overhaul of its technical glitch reporting requirements for stockbrokers. These changes aim to streamline compliance and reduce the regulatory burden on market intermediaries.
Relief for Smaller Brokers
Under the revised framework, brokers servicing fewer than 10,000 clients are now fully exempted from reporting technical glitches. This move is expected to provide much-needed relief to smaller entities that may lack the extensive IT infrastructure or resources of larger firms.
Extended Timelines and Exemptions
For brokers exceeding the 10,000-client threshold, the mandatory reporting time for technical incidents has been doubled to two hours. Furthermore, Sebi has introduced specific exemptions, excluding incidents that do not impact trading operations or those originating from systems external to the broker's own infrastructure.
Rationalized Penalties
The regulator has also adjusted the financial disincentive structure. This revised approach takes into account applicable exemptions, the nature of the glitch—whether major or minor—and the frequency of such occurrences, leading to a more calibrated penalty system.
