Sebi cuts down approval time for online trading

Sebi has reduced the approval time for internet-based trading for stock brokers from 30 days to just 7 days. The action intends to enhance the simplicity of conducting business in stock markets and eliminate outdated compliance requirements associated with the activities of market infrastructure institutions, as stated by Sebi in a circular issued on Thursday.

As per the regulation, the broker must request official authorization from the relevant stock exchange to offer online trading services. Following this, the stock exchange must now inform the member of their decision within 7 days instead of the previous 30 days.

Order routing systems facilitate Internet trading by directing client orders to exchange trading systems for execution. In this way, a customer located anywhere in the country can engage in trading by utilizing brokers' online trading platforms.

Moreover, the regulator has eliminated the current need for stock brokers to confirm IBT statistics periodically before they are released by stock exchanges. Instead of that, the exchanges would release IBT statistics using information from IBT terminals given by stock brokers. Additionally, stock brokers can provide exchanges with information or declarations about IBT terminals as they see fit.

The decision was made by Sebi in response to requests about internet-based trading from the Industry Standard Forum (ISF) of stock brokers. Sebi stated that the new guidelines will take effect immediately.