Mumbai: The Brokers Industry Standards Forum (ISF) and its Composition, Working and Vision was highlighted by the SEBI chairperson Madhabi Puri Buch here recently.
Describing India as having some of the ‘Best Practices’ globally, she said these called for: vision, experience, development, performance, ethic, knowledge, potential and competence.
“Best Practices is not a +magic Wand+, but all these factors put together, where our job is to fuel the economy,” she reiterated.
Noting that the Brokers ISF was set up on September 5 by SEBI as a pilot project, she said it is anchored by three broker associations including: Association of National Exchange Members of India (ANMI), Bombay Stock Exchange Brokers Forum (BBF) and Commodity Participants Association of India (CPAI).
The Brokers ISF comprised also the stock exchanges (BSE, MCX, MSE, NCDEX, NSE), Clearing Corporations (ICCL, MCXCCL, NCCL, NCL), and Depositories (CDSL, NSDL), besides also Bank-based and non-bank-based Qualified Stock Brokers (QSBs), Domestic and Foreign custodians, and Domestic and Foreign High frequency Trading (HFT) firms.
The ISF had held 18 meetings since September 2023 and its work had been formally acknowledged through SEBI circulars including one of November 13, 2023 — highlighting an MITC focusing on the critical aspects of the broker-client relationship.
Buch said upstreaming of client funds to the Clearing Corporations through a revised framework ensured “100%” end-of-day funds credit balances for clients with minimal friction in client servicing, faster and efficient turnaround time for clients’ funds payout.
A SEBI circular of January 12, 2024 highlighted a framework issued with Brokers ISF for Trading Members to provide facility of voluntary freezing/blocking online access of the trading account to their clients in case of any suspicious activities (e.g. hacking).
Other SEBI circulars highlighted: Ease in Compliance reporting where redundant reports and dependence on broker uploads were done away in MII systems that took data directly from original sources like bank/clearing corporations.
Replying to questions, Buch said that about some industry ‘players’ (who will try to circumvent the law), the Industry had made a representation to SEBI who would analyze it in a ‘balanced’ way to ensure a ‘win-win’ solution.
Investors should also have a chance to “plan/close” their business efforts in case of a holiday being declared in that period, she said, adding “There is no misinterpretation or ambiguity in SEBI’s decisions as we are ready to give clarity where required.”
About broken/technical glitches occurring and taking time even upto 15 minutes that affected the industry players, Buch said that SEBI has issued a framework in this regard.
“Technology is not infallible and large technology companies are also coming down. It’s better to have account with two brokers if your business is affected by even 15-minute glitches,” she said, adding “Everything is system-driven and a certain amount of time is needed for maintenance of the system – just like +changing tyres by going to the pit-stop+.” About instances of companies without identifiable promoters+, she said the ISF — in consultation with SEBI– publishes ‘legally binding’ industry standards where broker participants have to conform to them.
