On 27-06-2024, the Securities and Exchange Board of India notified the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2024 to amend the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992. These regulations came into force on 28-06-2024.
Key Points:
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The 2024 Regulations inserted Chapter IV A to include institutional mechanism for the prevention and detection of fraud or market abuse.
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The new Chapter includes systems for the surveillance of trading activities and internal controls, as well as the obligations of the stock brokers and their employees.
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The new Chapter also provides for escalation and reporting mechanisms which requires the submission of a periodic report to verify the adequacy and efficiency of the systems for internal control along with other provisions.
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The new Chapter inserts a whistle-blower policy that requires the stock brokers to establish and maintain a confidential channel for employees and other stakeholders to raise concerns about fraudulent activities, unfair/unethical practices, etc.