The Securities And Exchange Board of India (SEBI) has recently implemented significant changes to the Internet-Based Trading (IBT) rules. Here’s detailed breakdown of the new rules and their implications:
• Faster Approval Process: Under this revised rule, stock exchanges are now required to approve a stock broker’s application for internet-based trading within the 7 Days, which was previously 30 days.
• Elimination of Periodic Confirmation: SEBI has also removed the requirement for the periodic confirmation of IBT data by stock brokers, before it was published by the stock exchanges.
This means that stock exchanges will now directly publish IBT data based on the details provided by the brokers, which will significantly reduce administrative overhead and any potential delays.
Stock brokers must apply to their respective stock exchanges to obtain formal permission for providing internet-based trading services. The stock exchanges, which previously had 30 Days to communicate a decision, are now required to do so within just 7 days.
Internet trading can occur through order routing systems, which route the client orders to exchange trading systems for execution. This allows clients to trade using the internet through broker’s trading systems.
Additionally, the removal of the periodic confirmation requirement simplifies the process for brokers.
The new guidelines have been implemented within immediate effect.
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About SEBI
The Securities and Exchange Board of India (SEBI) is the regulatory authority which is responsible for overseeing the securities market in India, established in 1988. SEBI plays an important role in the Indian financial ecosystem by implementing the regulations that curb market malpractices and fraud.
For SEBI Guidelines : Click here.