The Securities and Exchange Board of India (SEBI) issued the ...

New SEBI Rules: Stock Brokers Must Boost Surveillance, Report Suspicious Activity, and Enhance Whistleblower Policies.

July 1, 2024

Notifications     SEBI

The Securities and Exchange Board of India (SEBI) issued the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2024, effective upon publication in the Official Gazette. This amendment introduces Chapter IVA, establishing an institutional mechanism for the prevention and detection of fraud or market abuse. Key provisions include definitions of terms such as "Designated Director," "fraud," "market abuse," and "suspicious activity." It mandates stock brokers to implement surveillance systems and internal controls to detect and prevent fraud or market abuse, maintain adequate know your client (KYC) systems, and establish a whistleblower policy. Stock brokers must report suspicious activities to stock exchanges within 48 hours and submit half-yearly reports. The Board of Directors must review these systems quarterly.

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