SEBI’s parameters for HNI Qualified Stockbrokers

It has recently come into speculation that the SEBI may prescribe a high net-worth requirement guideline for Qualified Stockbrokers who are in charge of handling a large number of clients, trade volumes and funds. The requirement for an efficient and enhanced risk management will be dictated to QSBs to comply with monitoring and regulating market infrastructure.

As per SEBI, 16brokers will fall under the QSB parameters due to heavy trading volumes. According to an analysis, the Reserve Bank of India’s classification of non-financial banking organisations into several levels for the implementation of an improved regulatory framework is comparable to SEBI’S strategy for QSBs. .According to the paper, a capital threshold requirement may assist to reduce risk in the situation of stockbrokers who operate with huge numbers of clients but retain low net worth. Earlier this year, SEBI raised the threshold for stockbrokers’ net worth to Rs 5 crore.

Brokers argue that since they’ve already been adhering to SEBI requirements, the compliance cost rise will only be slight. Because of the increased monitoring, there could be harsher consequences for some transgressions.[1]

[1] https://www.business-standard.com/article/markets/sebi-may-prescribe-higher-net-worth-needs-for-qualified-stockbrokers-122122500297_1.html