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Mumbai, Nov. 6 SEBI on Friday said it has allowed broking firms to provide access to clients through “authorised persons”.

This is being done “with a view to expanding the reach of the markets for exchange traded products”, a SEBI circular said.

This provision would cut time for brokers to enter the broking business as, unlike sub-brokers, authorised persons would only need approval of the stock exchange and would not have to wait for SEBI approval. It takes a sub-broker between four weeks and two months to get registered with SEBI, said a compliance officer with a broking firm.

A stockbroker may appoint one or more authorised persons after obtaining specific approval from the stock exchange concerned for each such person, according to SEBI regulations.

The approval as well as the appointment would be for a specific segment of the exchange.

According to SEBI, an authorised person would mean any person, individual, partnership firm, LLP or body corporate who is appointed as such by a stockbroker and who provides access to the trading platform of a stock exchange as an agent of the stockbroker.

The authorised person should have the necessary infrastructure such as adequate office space, the necessary equipment and manpower to effectively discharge the activities on behalf of the stock broker, SEBI’s Regulatory Framework for Market Access through Authorised Person said.

If any trading terminal is provided by the stockbroker to an authorised person, rules state, the place where such a trading terminal is located would be treated as the branch office of the stockbroker.

The authorized person will receive his remuneration – fees, charges, commission, salary for his services – only from the stockbroker and he will not charge any amount from the clients, said the framework.

More Stories on : Regulatory Bodies & Rulings | Financial Services

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