SEBI INTERMEDIARIES

[Mr. M. GOVINDARAJAN]

Intermediary

Regulation 2(1) (g) of Securities and Exchange Board of India (Regulations), 2008 defines the term ‘intermediary’ as a person mentioned in-

• clauses (b) and (ba) of sub-section (2) of section 11; and
• sub-section (1) and (1A) of section 12 of the Act;

 and includes an asset management company in relation to-

• the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996,
•  a clearing member of a clearing corporation or clearing house, foreign portfolio investors and a trading member of a derivative segment; or
•  currency derivatives segment of a stock exchange

but does not include foreign venture capital investor, mutual fund, collective investment scheme and venture capital fund.

The intermediaries play a vital role in the securities market in the primary market as well as in the secondary market.

List of registered intermediaries

The list of registered intermediaries under Securities and Exchange Board of India (‘SEBI’ for short) and the number of each registered intermediaries, are given as below-

• Alternative investment funds - 1145- as on 30.06.2023;
• Stock broker in equity segment - 5144 - as on 27.06.2023;
• Stock broker in equity derivative segment - 3713 - as on 27.06.2023;
• Stock broker in currency derivative segment - 2986 - as on 27.06.2023;
• Stock broker in interest rate derivate segment - 1816 - as on 27.06.2023;
• Stock brokers in debt segment - 648 - as on 27.06.2023;
• Stock brokers in commodity derivative segment - 2023 - as on 27.06.2023;
• Banker to an issue - 57 - as on 30.06.2023;
• Credit Rating Agency - 7 - as on 30.06.2023;
• Custodians - 17 - as on 30.06.2023;
• Debenture trustee - 26 - as on 30.06.2023;
• Designated Depository Participants - 17 - as on 30.09.2022;
• Qualified Depository Participants - 62 - as on 17.04.2017;
• Depository Participants - CDSL - 646 - as on 30.06.2023;
• Depository Participants - NSDL - 287 - as on 30.06.2023;
• FPIs/Deemed FPIs (erstwhile FIIs/QFIs) - 11427 -  as on 30.06.2023;
• Foreign Venture Capital Investors - 281 - as on 30.06.2023;
• Investment Adviser - 1324 - as on 30.06.2023;
• Infrastructure Investment Trust - 21 - as on 30.06.2023;
• KYC Registration Agency - 6 - as on 17.04.2017;
• Merchant Banker - 219 - as on 30.06.2023;
• Portfolio Managers - 418 - as on 30.06.2023;
• Registrars to an issue and share transfer agents - 76 - as on 30.06.2023;
• Research Analyst - 936 - as on 30.06.2023;
• Self Certified Syndicate Banks under the Syndicate ASBA facility for other than retail category (equity issuances) - 52 - as on 27.04.2022;
• Self Certified Syndicate Banks under the direct ASBF Facility (Equity issuances) - 52 - as on 25.08.2022;
• Self Certified Syndicate Banks eligible as issuer banks for UPI - 51 - as on 15.03.2022;
• Self Certified Syndicate Banks eligible as Sponsor Banks - 7 - as on 07.10.2022;
• Real Estate Investment Fund - 5 - as on 30.06.2023;
• List of mobile applications for using UPI in public issues - 29 - as on 07.07.2022;
• Self Certified Syndicate Banks under the direct ASBA facility (debt issuances) - 38 - as on 30.09.2021);
• Self Certified Banks under the Syndicate ASBA facility (debt issuances) - 44 - as on 30.09.2022;
• Vault Managers - 3

Source: www.sebi.gov.in.

Regulations for intermediaries

The following are the regulations framed by SEBI to regulate the respective intermediary-

1. SEBI (Stock Brokers) Regulations, 1992;
2. SEBI (Merchant Bankers) Regulations, 1992;
3. SEBI (Underwriters) Regulations, 1993;
4. SEBI (Registrars to an issue and Share Transfer Agents) Regulations, 1993;
5. SEBI (Portfolio Managers) Regulations, 1993;
6. SEBI (Debenture Trustees) Regulations, 1993;
7. SEBI (Bankers to an Issue) Regulations, 1994;
8. SEBI (Mutual Funds) Regulations, 1996;
9. SEBI (Custodian) Regulations, 1996;
10. SEBI (Credit Rating) Regulations, 1999;
11. SEBI [KYC (Know Your Client) Registration Agency)] Regulations, 2011;
12. SEBI (Alternative Investment Funds) Regulations, 2012;
13. SEBI (Investment Adviser) Regulations, 2013;
14. SEBI (Research Analysts) Regulations, 2014;
15. SEBI (Real Estate Investment Trusts) Regulations, 2014;
16. SEBI (Infrastructure Investment Trusts) Regulations, 2014;
17. SEBI (Foreign Portfolio Investors) Regulations, 2014;
18. SEBI (Depository Participants) Regulations, 2018;
19. SEBI (Portfolio Managers) Regulations, 2020;
20. SEBI (Vault Managers) Regulations, 2021.

Though regulations are made for each intermediary under the control of SEBI, SEBI also framed SEBI (Intermediaries) Regulations, 2008 vide Notification No. LAD-NRO/GN/2008/11/126538, dated 26.05.2008

Each regulation prescribes the procedure for registration, cancellation of registration, appeal against the cancellation of registration, surrender of registration certificate, manner of issue of notices, directions issued by the Board to the intermediaries, obligations of intermediaries, rights of the Board for inspection and to take disciplinary action against the intermediaries, appointment of auditor or valuer, submission of the report by Auditor/valuer.  The regulations also prescribe the Code of Conduct which shall be followed by the respective intermediary.

The Board is also having power to give exemption from the enforcement of regulations in special cases and also to issue clarifications to remove any difficulty in the application or interpretation of these regulations and also guidelines.