SEBI has taken a big step in the interest of stock brokers. It has changed the rules of penalty imposed by the stock exchanges. SEBI announced this on October 10. According to the new rule, if a stock broker is found guilty of violating the same rule on multiple stock exchanges, only one major stock exchange will be allowed to impose penalty on him.
After the lead exchange imposes penalty, no other exchange will impose penalty on the broker for violation of the same rule. Currently, exchanges impose different penalties for violation of the same rule. In some cases where a stock broker has membership of multiple exchanges, multiple penalties are imposed against him for violation of the same rule.
SEBI has said in this regard, “A major step has been taken in the direction of ease of doing business of stock brokers. The rules for imposing penalty on stock brokers have been changed by the stock exchanges.” The regulator has also decided to use the word ‘financial disincentive’ instead of ‘penalty’.
While giving relief to stock brokers, SEBI has said that the revised penalty framework will also be applicable to the ongoing enforcement proceedings. This has brought great relief to the stock broker community. Changes in penalty frameworks will increase ease of doing business and compliance. A delegation of stock brokers had met SEBI in this regard. After this SEBI had formed a working group. It included representatives of exchanges and brokers associations.
Moneycontrol had reported on March 26 that stock brokers may get relief in the matter of penalty. It was also told that SEBI is working on the mechanism of ‘one event, one penalty’. SEBI also announced the expansion of the Collective Reporting Platform (SPM). It is a common compliance reporting system. It will cover more than 30 reports from October 15, 2025. This will reduce compliance costs.