Internet-based trading: SEBI reduces approval time for brokers to seven days

The stock exchanges will grant approval to stock brokers for online or internet-based trading (IBT) in seven days instead of 30 days earlier.

Markets regulator Securities and Exchange Board of India (SEBI) recently changed the norm with an aim to ensure ease of doing business and remove obsolete compliance requirements. And these new norms will be applicable with immediate effect.

Generally, brokers have to apply to a stock exchange for a formal permission to provide IBT service. The stock exchange is required to revert to the member within 30 days of the date of completed application submitted to the exchange. As per the latest change in norm, this timeline has been reduced to seven days now.

In the internet trading, investors can trade through order routing systems, which will route client orders to exchange trading systems for execution. As a result, an individual sitting in any part of the country can trade via the internet as a medium through brokers' internet trading systems.

In addition, the markets regulator has abolished the existing requirement of periodic confirmation of IBT statistics by stock brokers before they are published by stock exchanges.

Instead, exchanges will now publish statistics on the basis of details of IBT terminals provided by stock brokers. In this regard, exchanges can obtain information or declaration about the said terminals from stock brokers as and when they need..

The decision has been taken following the markets regulator receiving requests pertaining to IBT from the Industry Standard Forum (ISF) of stock brokers.

Markets regulator had introduced the IBT service in 2000, and the National Stock Exchange (NSE) was the first exchange to grant registration to its members.