The Securities and Exchange Board of India (SEBI) is looking at segregation of settlement of retail and proprietary trades to ensure there is no netting of the two categories.

Brokers are permitting access to clients through the prop account for a variety of reasons including wanting to fund their margin, SEBI chairperson Madhabi Puri Buch said on Monday.

“The industry has made a representation to us that there are different revenue models that brokers have and some of them may look like they are misused but they are not. We will analyse this in a balanced way to separate the wheat from the chaff,” she said.

Trading session

With respect to extended trading for the market, SEBI said there were divergent views among the broking community and there was a lot of deliberation that was still going on. “It’s a divided house and we have not yet reached the stage of getting views from investors,” said Buch.

The National Stock Exchange (NSE) had planned to extend the trading hours by three hours for index derivatives by March 2024, according to reports.

SEBI was moving towards offsite inspections for brokers that would be automated, Buch said.

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She said the Industry Standards Forum (ISF), which was in the pilot stage, would eventually be made part of the permanent regulatory architecture. She said the brokers ISF had done a commendable job in the past four months in giving implementable recommendations on standards and guidelines of implementing regulatory directives.

“There are a large number of pilots running currently. The framework will be a single framework and will have a legal standing,” she said.

The Brokers ISF was set up in September last year on a pilot basis to recommend industry standards to implement various regulatory directives and is anchored by broker member associations Association of National Exchange Members of India, Bombay Stock Exchange Brokers Forum and Commodity Participants Association of India.

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