## Report on the Securities and Exchange Board of India Depositories and Participants Amendment Regulations, 2022
**1. Executive Summary:**
This report analyzes the Securities and Exchange Board of India (SEBI) Depositories and Participants Amendment Regulations, 2022, published on February 23, 2022. This amendment modifies the Securities and Exchange Board of India Depositories and Participants Regulations, 2018. The key change involves revising the net worth requirements for stock brokers to register as depository participants. Specifically, the amendment mandates a phased increase in net worth, reaching three crores within one year and five crores within two years of the notification. The report details the specific changes, affected stakeholders, and potential impact of these revisions on the securities market.
**2. Introduction:**
This report aims to provide an informative overview of the Securities and Exchange Board of India Depositories and Participants Amendment Regulations, 2022, based solely on the provided official text. The analysis will focus on the changes introduced by this amendment and their implications for relevant stakeholders.
**3. Policy Overview:**
* **Original Policy Being Amended:** Securities and Exchange Board of India Depositories and Participants Regulations, 2018.
* **Core Objective(s):** Based on the amendment's context, a core objective of the original regulations is likely to regulate the functioning of depositories and participants in the securities market to ensure market integrity and investor protection. This specific amendment seems designed to strengthen the financial capacity of stock brokers acting as depository participants.
**4. Background and Rationale:**
This amendment appears to be driven by the need to strengthen the financial stability of stock brokers operating as depository participants. The amendment text explicitly addresses net worth requirements, implying that the original regulations' net worth provisions were deemed insufficient or in need of adjustment to mitigate risks associated with depository participants. Raising the net worth thresholds likely aims to ensure that depository participants have sufficient capital to withstand market volatility and meet their obligations, ultimately enhancing investor confidence and market stability.
**5. Key Provisions / Changes:**
This amendment focuses on revising regulation 35, clause a, subclause viii of the Securities and Exchange Board of India Depositories and Participants Regulations, 2018. The key changes are as follows:
* **Specific Part of Original Policy Changed:** Regulation 35, clause a, subclause viii, concerning net worth requirements for stock brokers.
* **New Rule/Provision:** The original provisos relating to net worth are being replaced with the following:
* A stock broker shall have a net worth of rupees three crores within one year of the date of notification of the Securities and Exchange Board of India Depositories and Participants Amendment Regulations, 2022.
* The net worth shall be increased to rupees five crores within two years of the date of notification of the Securities and Exchange Board of India Depositories and Participants Amendment Regulations, 2022.
* A self-clearing member fulfilling the networth requirements as provided under the Securities and Exchange Board of India Stock Brokers Regulations, 1992 shall also be eligible to register as a depository participant.
* **Difference/Effect of the Change:** The amendment introduces a phased increase in the minimum net worth requirement for stock brokers to act as depository participants. This is a significant increase from potentially lower initial requirements. The addition regarding self-clearing members provides clarity on their eligibility based on existing net worth requirements under separate regulations. This change likely aims to raise the bar for participation and reduce the risk of financially unstable entities acting as depository participants.
**6. Target Audience and Stakeholders:**
The primary target audience and directly affected stakeholders are:
* Stock brokers intending to register or already registered as depository participants.
* Self-clearing members as defined under the Securities and Exchange Board of India Stock Brokers Regulations, 1992
**7. Implementation Aspects (Inferred):**
* **Responsible Agency:** Securities and Exchange Board of India (SEBI).
* **Timelines:**
* Stock brokers have one year from February 23, 2022, to reach a net worth of rupees three crores.
* They have two years from February 23, 2022, to reach a net worth of rupees five crores.
* **Procedures:** While the specific procedures for demonstrating compliance with the new net worth requirements are not detailed in the provided text, it can be inferred that SEBI will likely require stock brokers to submit audited financial statements or other relevant documentation to verify their net worth.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these changes are:
* **Increased Financial Stability:** A more financially robust pool of depository participants.
* **Reduced Risk:** Lower probability of depository participant default impacting investors and the market.
* **Market Consolidation:** Potentially, a reduction in the number of smaller stock brokers acting as depository participants who may not be able to meet the increased net worth requirements. This could lead to consolidation within the industry.
* **Enhanced Investor Protection:** Increased confidence in the safety and security of securities held with depositories.
**9. Conclusion:**
The Securities and Exchange Board of India Depositories and Participants Amendment Regulations, 2022, represents a significant step towards strengthening the financial resilience of depository participants. By raising the net worth requirements for stock brokers, SEBI aims to promote market stability, reduce systemic risk, and ultimately enhance investor protection. These amendments will likely have a notable impact on stock brokers currently operating or intending to operate as depository participants, requiring them to meet the increased financial thresholds within the specified timelines.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body in India for securities and commodity market.
Securities and Exchange Board of India Act, 1992: The Act of Parliament of India that established the Securities and Exchange Board of India.
Depositories Act, 1996: An act to provide for the establishment of depositories in securities with the objective of ensuring free transferability of securities with speed, accuracy and security
Securities and Exchange Board of India Depositories and Participants Regulations, 2018: Regulations by the Securities and Exchange Board of India pertaining to depositories and participants.
Securities and Exchange Board of India Depositories and Participants Amendment Regulations, 2022: Amendment to the Securities and Exchange Board of India Depositories and Participants Regulations, 2018
Securities and Exchange Board of India Stock Brokers Regulations, 1992: Regulations pertaining to stock brokers as specified by the Securities and Exchange Board of India.
Securities and Exchange Board of India Regulatory Sandbox Amendment Regulations, 2020: Amendment to the Securities and Exchange Board of India Regulatory Sandbox Regulations.
Securities and Exchange Board of India Payment of Fees and Mode of Payment Amendment Regulations 2021: Amendment to the Securities and Exchange Board of India Payment of Fees and Mode of Payment Regulations.
Securities and Exchange Board of India Regulatory Sandbox Amendment Regulations, 2021: Amendment to the Securities and Exchange Board of India Regulatory Sandbox Regulations.
Securities and Exchange Board of India Depositories and Participants Amendment Regulations, 2021: Amendment to the Securities and Exchange Board of India Depositories and Participants Regulations, 2018
Securities and Exchange Board of India Depositories and Participants Second Amendment Regulations, 2021: Second Amendment to the Securities and Exchange Board of India Depositories and Participants Regulations, 2018 in the year 2021
Securities and Exchange Board of India Vault Managers Regulations, 2021: Regulations by the Securities and Exchange Board of India pertaining to Vault Managers
Mumbai, Maharashtra: City in India; location of the notification.
Ajay Tyagi: Chairman of Securities and Exchange Board of India
New Delhi, Delhi: Capital of India.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-एम.एच.-अ.-23022022-233692
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असाधारण
EXTRAORDINARY
भाग III—खण् ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 105] िई ददल्ली, बुधिार, फरिरी 23, 2022/फाल्ग िु 4, 1943
No. 105] NEW DELHI, WEDNESDAY, FEBRUARY 23, 2022/PHALGUNA 4, 1943
भारतीय प्रजतभजू त और जिजिमय बोडड
अजधसचू िा
मुम्बई, 23 फरिरी, 2022
भारतीय प्रजतभजू त और जिजिमय बोडड
(जिक्षपे ागार और सहभागी) (सिं ोधि) जिजियम, 2022
स.ं सबे ी/एलएडी-एिआरओ/िीएि/2022/74.—बोडड, जिक्षेपागार अजधजियम, 1996 की धारा 25 के साथ पठित
भारतीय प्रजतभूजत और जिजिमय बोडड अजधजियम, 1992 की धारा 30 द्वारा प्रदाि की गई िजियों का प्रयोग करते हुए
एतद्द्वारा भारतीय प्रजतभूजत और जिजिमय बोडड (जिक्षेपागार और सहभागी) जिजियम, 2018 का और संिोधि करिे के जलए
जिम्नजलजखत जिजियम बिाता ह,ै अथाडत:्-
1. इि जिजियमों को भारतीय प्रजतभूजत और जिजिमय बोडड (जिक्षेपागार और सहभागी) (सिं ोधि) जिजियम,
2022 कहा िा सकेगा ।
2. ये जिजियम रािपत्र म ेंइिके प्रकािि की तारीख को लागू होंग े ।
3. भारतीय प्रजतभूजत और जिजिमय बोडड (जिक्षेपागार और सहभागी) जिजियम, 2018 म-ें
I. जिजियम 35 म,ें खंड (क) म,ें उप-खंड (viii) म,ें पहल,े दसू रे और तीसरे परंतुकों के स्ट्थाि पर जिम्नजलजखत परंतुक आ
िाएंगे, अथाडत,् -
1275 GI/2022 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
“परंत ु यह दक स्ट्टॉक दलाल (स्ट्टॉक ब्रोकर) की िुद्ध-माजलयत (िेटिथड) तीि करोड़ रुपय े की होगी [भारतीय प्रजतभूजत
और जिजिमय बोड ड (जिक्षेपागार और सहभागी) (संिोधि) जिजियम, 2022 के अजधसूजचत होि े की तारीख स े एक
िर्ड के भीतर], जिसे बढाकर पााँच करोड़ रुपय े करिा होगा [भारतीय प्रजतभूजत और जिजिमय बोडड (जिक्षेपागार और
सहभागी) (संिोधि) जिजियम, 2022 के अजधसूजचत होिे की तारीख स े दो िर्ों के भीतर]:
परंत ु यह और दक भारतीय प्रजतभूजत और जिजिमय बोडड (स्ट्टॉक दलाल) जिजियम, 1992 के तहत दी हुई िुद्ध-
माजलयत (िेटिथड) संबंधी अपक्षे ाए ाँ पूरी करि े िाला स्ट्ि-समािोधि सदस्ट्य (सल्े फ-क्लीयररंग मेम्बर) भी जिक्षेपागार
सहभागी (जडपॉज़िटरी पार्टडजसपेंट) के रूप म ेंरजिस्ट्रीकृत (रजिस्ट्टर) होिे के जलए पात्र होगा ।”
अिय त्यागी, अध्यक्ष
[जिज्ञापि-III/4/असा./660/2021-22]
पाद ठटप्पण :
1. भारतीय प्रजतभूजत और जिजिमय बोडड (जिक्षेपागार और सहभागी) जिजियम, 2018, सं. सेबी/एल.ए.डी.-
एि.आर.ओ./िी.एि./2018/40, 3 अिूबर, 2018 को भारत के रािपत्र में प्रकाजित हुए थे ।
2. भारतीय प्रजतभूजत और जिजिमय बोडड (जिक्षेपागार और सहभागी) जिजियम, 2018 तत्पश्चात ्–
क. 4 िूि 2019 को भारतीय प्रजतभूजत और जिजिमय बोडड (जिक्षपे ागार और सहभागी) (संिोधि) जिजियम, 2019,
स.ं सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2019/20, द्वारा
ख. 21 फरिरी, 2020 को भारतीय प्रजतभूजत और जिजिमय बोड ड (जिक्षेपागार और सहभागी) (संिोधि) जिजियम,
2020, स.ं सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2020/04, द्वारा
ग. 17 अप्रैल, 2020 को भारतीय प्रजतभूजत और जिजिमय बोड ड (रेग्यलू ेटरी सैंडबॉक्स) (संिोधि) जिजियम, 2020,
स.ं सेबी/एल.ए.डी.-एिआरओ/िीएि/2020/10, द्वारा
घ. 5 मई, 2021 को भारतीय प्रजतभूजत और जिजिमय बोडड (फीस का भुगताि और भुगताि का माध्यम) (संिोधि)
जिजियम, 2021, स.ं सेबी/एलएडी-एिआरओ/िीएि/2021/23, द्वारा
ङ. 3 अगस्ट्त, 2021 को भारतीय प्रजतभूजत और जिजिमय बोड ड (रेग्यूलेटरी सडैं बॉक्स) (संिोधि) जिजियम, 2021,
स.ं सेबी/एलएडी-एिआरओ/िीएि/2021/30, द्वारा
च. 13 अगस्ट्त, 2021 को भारतीय प्रजतभूजत और जिजिमय बोड ड (जिक्षेपागार और सहभागी) (संिोधि) जिजियम,
2021, स.ं सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2021/43, द्वारा
छ. 26 अिूबर, 2021 को भारतीय प्रजतभूजत और जिजिमय बोडड (जिक्षेपागार और सहभागी) (दसू रा संिोधि)
जिजियम, 2021, स.ं सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2021/53, द्वारा
ि. 31 ददसम्बर, 2021 को भारतीय प्रजतभूजत और जिजिमय बोड ड (िॉल्ट प्रबंधक) जिजियम, 2021, स.ं
सेबी/एल.ए.डी.एि.आर.ओ./िी.एि./2021-61, द्वारा
संिोजधत हुए थ े ।[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 23rd February, 2022
Securities and Exchange Board of India (Depositories and Participations)
(Amendment) Regulations, 2022
No. SEBI/LAD-NRO/GN/2022/74.—In exercise of the powers conferred by Section 30 of the
Securities and Exchange Board of India Act, 1992 read with Section 25 of the Depositories Act, 1996, the
Board hereby makes the following Regulations to further amend the Securities and Exchange Board of
India (Depositories and Participants) Regulations, 2018 namely:—
1. These Regulations may be called the Securities and Exchange Board of India (Depositories and
Participants) (Amendment) Regulations, 2022.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018-
I. in regulation 35, in clause (a), in sub-clause (viii), the first, second and third provisos shall be
substituted with the following, namely, -
“Provided that the stock broker shall have a networth of rupees three crores {within one year of the
date of notification of the Securities and Exchange Board of India (Depositories and Participants)
(Amendment) Regulations, 2022}, which shall be increased to rupees five crores {within two years
of the date of notification of the Securities and Exchange Board of India (Depositories and
Participants) (Amendment) Regulations, 2022}:
Provided further that a self-clearing member fulfilling the networth requirements as provided under
the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 shall also be
eligible to register as a depository participant.”
AJAY TYAGI, Chairman
[ADVT./III/4/Exty./660/2021-22]
Footnote:
1. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018
were published in the Gazette of India on October 3, 2018 vide No. No. SEBI/LAD-
NRO/GN/2018/40.
2. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018
were subsequently amended–
a. June 4, 2019, by The Securities and Exchange Board of India (Depositories and
Participants) (Amendment) Regulations, 2019, vide No. SEBI/LAD-NRO/GN/2019/20.
b. February 21, 2020, by the Securities and Exchange Board of India (Depositories and
Participants) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/04.
c. April 17, 2020, by the Securities and Exchange Board of India (Regulatory Sandbox)
(Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/10.4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
d. May 05, 2021, by the Securities and Exchange Board of India (Payment of Fees and Mode
of Payment) (Amendment) Regulations 2021, vide No. SEBI/LAD-NRO/GN/2021/23.
e. August 03, 2021, by the Securities and Exchange Board of India (Regulatory Sandbox)
(Amendment) Regulations, 2021, vide No. SEBI/LAD-NRO/GN/2021/30.
f. August 13, 2021 by the Securities and Exchange Board of India (Depositories and
Participants) (Amendment) Regulations, 2021, vide No. SEBI/LAD-NRO/GN/2021/43.
g. October 26, 2021, by the Securities and Exchange Board of India (Depositories and
Participants) (Second Amendment) Regulations, 2021, vide No. SEBI/LAD-
NRO/GN/2021/53.
h. December 31, 2021, by the Securities and Exchange Board of India (Vault Managers)
Regulations, 2021, vide No. SEBI/LAD-NRO/GN/2021/61.
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