Sebi may allow stock brokers in Gift-IFSC
Sebi mulls removing its registration norm which mandated a JV
New Delhi: Markets regulator Sebi on Friday proposed to abolish the requirement for stockbrokers to seek its approval for floating a subsidiary or joint venture (JV) to undertake securities market-related activities in Gujarat International Finance Tec-city – International Financial Services Centre (GIFT-IFSC).
Moreover, stockbrokers proposing to undertake securities market related activities in GIFT-IFSC can do so under a Separate Business Unit (SBU) of the stock broking entity itself on an arm’s-length basis, Sebi said in its consultation paper.
At present, Sebi-registered stockbrokers are required to obtain approval from it in the form of NOC to float subsidiaries or to enter into joint ventures to undertake securities market-related activities in GIFT-IFSC. Further, stockbrokers are required to maintain an arms-length relationship between their activities and that of their subsidiary/joint venture in GIFT-IFSC. Such a relationship is required to be maintained in terms of key personnel, infrastructure, segregation of books and records, independent regulatory control and supervisory mechanism, etc.
“In order to facilitate Sebi registered stockbrokers to undertake securities market related activities in GIFT-IFSC, it has been decided to do away with the requirement of obtaining specific approval from Sebi. Stockbrokers proposing to undertake securities market related activities in GIFT-IFSC may do so under a Separate Business Unit (SBU) of the stock broking entity itself,” the regulator said in its consultation paper.
The matters related to policy, eligibility criteria, risk management, investor grievances, inspection, enforcement, claims among others for the separate business unit in GIFT-IFSC would be specified under the regulatory framework issued by the respective regulatory authority. All activities of the such SBU in GIFT-IFSC should be under the jurisdiction of that regulatory authority. Sebi suggested that stockbrokers should ensure that securities market related activities of the SBU in GIFT-IFSC are segregated.
