**Summary:**
This circular, issued by the Securities and Exchange Board of India (SEBI) on July 04, 2024, modifies the timelines for enhanced supervision of stock brokers and depository participants. Specifically, it amends Circular no. SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016, and the Master Circular for Stock Brokers dated May 22, 2024.
The key change is an extension of the deadline for submitting annual audited accounts and net worth certificates from September 30th to October 31st of the relevant year. This applies to both stock brokers (regarding the furnishing of annual audited accounts) and depository participants (regarding the furnishing of net worth certificates for the year ending March 31st).
Stock Exchanges and Depositories are directed to:
* Notify their members/participants of these changes and disseminate the information on their websites.
* Amend relevant Byelaws, Rules, and Regulations accordingly.
* Report on the implementation status in their Monthly Development Reports to SEBI.
This circular, effective immediately, is issued under the authority granted by Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Section 19 of the Depositories Act, 1996.
The complete circular is available on the SEBI website (www.sebi.gov.in) under the category "Legal Circulars." For further information, contact Aradhana Verma, General Manager, at 022-26449633 or aradhana@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): The regulatory body for securities markets in India, responsible for protecting investors and regulating the securities market.
Stock Exchanges: Recognized entities that facilitate the trading of stocks and other securities.
Depositories: Organizations that hold securities in electronic form, enabling efficient trading and settlement.
Stock Brokers: Intermediaries that execute trades on behalf of investors in the stock market.
Depository Participants: Agents of depositories that provide depository services to investors.
Securities and Exchange Board of India Act, 1992: The act of parliament that established the Securities and Exchange Board of India and defines its powers and functions.
Depositories Act, 1996: The act of parliament that provides a legal framework for the establishment and regulation of depositories in India.
Master Circular for Stock Brokers: A comprehensive document issued by SEBI containing guidelines and regulations for stock brokers.
CIRCULAR
SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/95 July 04, 2024
To,
All recognized Stock Exchanges
All Depositories
Madam / Sir,
Sub: Modification to Enhanced Supervision of Stock Brokers and Depository
Participants
1. SEBI, vide Circular no. SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated
September 26, 2016 (hereinafter mentioned as ‘circular’) and Master Circular for
Stock Brokers dated May 22, 2024 (hereinafter mentioned as ‘Master Circular’),
inter alia, specified timelines for submission of annual audited accounts/net worth
certificate by Stock Brokers/Depository Participants as part of monitoring criteria,
the details of which are as follows:
Relevant clauses Existing provision
Para 6.1.1.c (Monitoring criteria for Failure to furnish Annual Audited Accounts
by September 30th of the relevant year
Stock Brokers) of Annexure to Circular
and Para 15.8.1.1.c of Master Circular
Para 6.1.2.a (Monitoring criteria for Failure to furnish Net worth certificate to
Depository for year ending March 31st by
DPs) of Annexure to Circular and Para
September 30th
15.8.1.2.a of Master Circular
2. As a step towards ease of doing business, it has been decided to revise the timeline
to October 31st of the relevant year. Accordingly, the said paras shall be read as
under:
Page 1 of 2Relevant clauses Modified provision
Para 6.1.1.c (Monitoring criteria for Failure to furnish Annual Audited Accounts
by October 31st of the relevant year
Stock Brokers) of Annexure to Circular
and Para 15.8.1.1.c of Master Circular
Para 6.1.2.a (Monitoring criteria for Failure to furnish Net worth certificate to
Depository for year ending March 31st by
DPs) of Annexure to Circular and Para
October 31st
15.8.1.2.a of Master Circular
3. The provisions of this circular shall come into force with immediate effect.
4. The Stock Exchanges/Depositories are directed to:
4.1. bring the provisions of this circular to the notice of their members / participants
and also disseminate the same on their websites;
4.2. make necessary amendments to the relevant Bye-laws, Rules and Regulations
for the implementation of the above decision;
4.3. communicate to SEBI, the status of the implementation of the provisions of this
circular in their Monthly Development Reports.
5. The circular is issued with the approval of competent authority.
6. This circular is issued in exercise of powers conferred under Section 11(1) of
Chapter IV of the Securities and Exchange Board of India Act, 1992, and Section
19 of Chapter IV of the Depositories Act, 1996 to protect the interests of investors
in securities and to promote the development of, and to regulate the securities
markets.
7. This circular is available on SEBI website at www.sebi.gov.in under the
category: ‘Legal → Circulars’.
Yours faithfully,
Aradhana Verma
General Manager
Tel. No: 022 26449633
aradhanad@sebi.gov.in
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