In an effort to ease retail participation in the securities market, regulator SEBI will pitch for a common KYC (Know Your Customer) norm for banking and the capital markets. With this, your bank KYC specification will soon be enough for you to avail of other financial services, offered by securities market intermediaries.

“SEBI is collaborating actively with the RBI on this issue, and implementation of this initiative will be done soon,” said a broker who attended a meeting with SEBI officials here. The meeting was called to discuss ways to enhance retail investors’ interest in participating in stock markets.

During the meeting, brokers raised concerns about the large number of brokerage firms going out of business as a result of declining retail interest. On the BSE, for instance, retail investors have been net sellers over the past five years. In 2015, shares worth nearly ₹10,000 crore were offloaded by retail participants. This, along with the high compliance cost, had forced 85 per cent of brokers having capital between ₹1 crore and ₹10 crore to shut shop.

To prop up declining revenue in the broking business, SEBI asked the Association of National Exchanges Members of India, a pan-India body comprising trading members across the country, to share their study on falling broking commissions.

According to market watchers, SEBI’s move to revive retail interest is in contrast to the earlier stance of its Chairman UK Sinha that “small investors and uninformed investors… should not enter the market directly.”

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