The SEBI (Stock Brokers) Regulations, 2026 were notified on 7 January 2026 and repealed the SEBI (Stock Brokers) Regulations, 1992 on the same day. Eleven chapters and fifty-one regulations replace an instrument that had absorbed three decades of amendments and a large body of circulars. Existing registrations continue untouched, and no broker was required to apply again. The single dated obligation, a designated director resident in India for 182 days in the financial year, fell due on 7 July 2026 for brokers already registered.
This article sets out what the SEBI (Stock Brokers) Regulations, 2026 changed, what they left alone, and what they now require of a broker.
The instrument carries notification number SEBI/LAD-NRO/GN/2026/291 and was published in the Gazette of India, Extraordinary, Part III, Section 4, No. 16. It came into force on the date of that publication rather than on a later appointed day, so the repeal and the new obligations took effect together.
Most of what the 2026 Regulations contain is not new law. A large part of the framework already applied to brokers through circulars, and the rewrite lifts those requirements into the regulations themselves. That change of source matters, because a requirement in a regulation carries a different enforcement consequence from the same requirement in a circular.
Several published summaries of this instrument state figures and conditions that the notified text does not contain. Everything below is taken from the gazette text, which is linked in the references, and the points where commentary and text diverge are identified as they arise.
Why did SEBI replace the 1992 stock brokers framework?
SEBI replaced the 1992 framework because it had stopped being the place where the law on stock broking actually lived. By 2025 the operative requirements sat in circulars issued under it, and the regulations themselves had become a thin frame around that accumulated material.
The instrument’s own title had gone stale first. It was originally the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. SEBI discontinued the sub-broker category as a registered intermediary in 2018, on the stated ground that there was no operative difference between a sub-broker and an authorised person, and existing sub-brokers migrated to authorised person or trading member status by 31 March 2019.
The bigger pressure came from client assets. In November 2019, SEBI passed an ex-parte ad-interim order against a broking house that had transferred securities belonging to more than 95,000 clients into a demat account it had never disclosed to the exchanges, by misusing the power of attorney those clients had signed, and had pledged them to raise funds for itself and its group entities. The securities involved were valued at roughly Rs 2,300 crore.
That episode set a pattern that repeated for the next four years. A structural weakness produced a misuse event, SEBI closed the specific hole by circular, and the circular stack grew. The pledge and re-pledge mechanism introduced in 2020 removed the power of attorney route by keeping client securities in the client’s own demat account. The upstreaming framework of June 2023 required brokers to move clear client credit balances to clearing corporations at the end of each day.
Read together, those reforms rebuilt client-asset protection almost entirely outside the regulations. The 2026 rewrite is best understood as the moment SEBI moved that body of law back inside the instrument, alongside a general simplification.
The sequence was deliberate and public. SEBI issued a consultation paper on reviewing the 1992 Regulations on 13 August 2025, the Board approved the replacement at its 212th meeting on 17 December 2025, and notification followed on 7 January 2026. Readers new to how brokers sit within the wider market structure may find our overview of capital markets in India a useful companion to this piece.
The 2026 stock brokers rulebook runs to fifty-one regulations
The SEBI (Stock Brokers) Regulations, 2026 run to fifty-one regulations across eleven chapters, with regulations 1 to 3 forming the preliminary chapter. The English text runs to roughly 9,000 words against about 18,800 in the instrument it replaced.
The chapters run in this order: registration (II), general obligations and responsibilities (III), the institutional mechanism for prevention and detection of fraud or market abuse (IV), inspection (V), action in case of default (VI), power to relax strict enforcement (VII), code of conduct (VIII), fees (IX), net worth and deposit requirements (X), and miscellaneous (XI).
The reduction in length comes mainly from where things now sit rather than from deletion. The code of conduct, the fee schedule and the net worth requirements were schedules under the old instrument and are now chapters VIII, IX and X. Registration forms left the regulations altogether: regulation 2(1)(h) defines a form as one specified by SEBI or by a recognised stock exchange, which means the format can change without amending the regulations.
Genuinely obsolete material was dropped, including provisions on physical delivery of shares and provisions referring to the Forward Markets Commission, which ceased to exist as a separate regulator in 2015.
What changed under the SEBI (Stock Brokers) Regulations, 2026?
The changes under the SEBI (Stock Brokers) Regulations, 2026 fall into three groups: a small number of genuinely new obligations, a larger number of existing circular requirements that have been codified, and a set of structural simplifications.
The genuinely new obligations are the resident designated director requirement, the eight-year record retention period under regulation 16, the mandatory whistle-blower policy under regulation 25, and the institutional mechanism for detecting fraud and market abuse in Chapter IV, including documented processes to detect mule accounts.
The codified requirements are the larger group, and they are the ones most often misdescribed. Upstreaming of client funds, the pledge and re-pledge architecture, client-level collateral segregation, continuous enrolment on SEBI’s complaint systems and the cyber security framework were all in force through circulars before 2026. A broker already complying with them has nothing new to build. What changed is that breach is now a breach of a regulation.
The structural simplifications are led by single registration. Under regulation 3(1), a broker registered with SEBI needs no separate registration to act as a clearing member in any segment, subject only to the approval of the clearing corporation concerned, and regulation 3(2) runs the same rule in the opposite direction for clearing members wanting to act as brokers.
That change is more significant than it first appears, because the position it displaces had been settled by the Supreme Court. In Securities and Exchange Board of India v. National Stock Exchange Members Association, Supreme Court of India, 13 October 2022, the Court held that a broker operating on more than one exchange required a separate certificate of registration for each, reading the reference to a certificate in Section 12(1) of the SEBI Act, 1992 distributively, and upheld the fee consequence that followed. Regulation 3 does not overrule that judgment. It removes the framework the judgment was interpreting.
Two further simplifications are worth noting. Regulation 27(2) allows SEBI to conduct a joint inspection with a recognised stock exchange, clearing corporation or depository, in place of sequential inspections by each. And regulation 2(1)(o) now defines proprietary trading as trading by a broker on its own account in any segment, where the previous definition confined the proprietary trading member category to the debt segment.
Several things did not change. The net worth figures themselves are carried over rather than raised, and the fit and proper standard continues to be assessed under Schedule II of the SEBI (Intermediaries) Regulations, 2008.
The requirement of prior SEBI approval for a change in control also survives, though regulation 10(c) now requires the application to be made through a recognised stock exchange rather than filed directly. Where control is at issue, the definition in regulation 2(1)(c) points to the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 for listed bodies corporate, which our note on open offers under the SEBI Takeover Code sets out in more detail.
1992 versus 2026: what actually changed
SEBI (Stock Brokers) Regulations, 1992 compared with the SEBI (Stock Brokers) Regulations, 2026
ItemPosition under 1992Position under 2026
ItemRegistration across exchanges
Under 1992Separate certificate and fee for each exchange
Under 2026Single registration, exchange approval per segment (reg 3)
ItemBroker acting as clearing member
Under 1992Separate registration required
Under 2026No separate registration, subject to clearing corporation approval (reg 3(1))
ItemRecord retention
Under 1992Five years (reg 18)
Under 2026Eight years (reg 16)
ItemResident designated director
Under 1992No requirement
Under 2026At least one director in India 182 days a year (reg 6(2)(j))
ItemProprietary trading member
Under 1992Debt segment only (reg 2(cb))
Under 2026Any segment (reg 2(1)(o))
ItemCode of conduct, fees, net worth
Under 1992Schedules II, III, V and VI
Under 2026Chapters VIII, IX and X
ItemRegistration forms
Under 1992Prescribed in Schedule I
Under 2026Specified by SEBI or the exchange (reg 2(1)(h))
ItemChange of control filing
Under 1992Prior approval of SEBI, filed directly (reg 9(c))
Under 2026Prior approval of SEBI, applied through the exchange (reg 10(c))
ItemFraud and market abuse systems
Under 1992No institutional mechanism
Under 2026Chapter IV: surveillance, mule account detection, whistle-blower policy
ItemInspection
Under 1992Separate inspections by SEBI and each institution
Under 2026Joint inspection permitted (reg 27(2))
ItemOther regulated activities
Under 1992Not expressly addressed
Under 2026Permitted under RBI, IRDAI, PFRDA, IFSCA, MCA, IBBI frameworks (reg 12)
ItemNet worth quantum
Under 1992Rs 1 cr / 5 cr / 15 cr / 50 cr (as amended 2022)
Under 2026Unchanged (reg 47)
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Who can register as a stock broker under the SEBI (Stock Brokers) Regulations, 2026?
An applicant eligible for membership of a recognised stock exchange can register as a stock broker under the SEBI (Stock Brokers) Regulations, 2026, provided it also meets the infrastructure, experience, certification and net worth conditions in regulation 6(2). The application runs through the exchange rather than directly to the regulator. Regulation 4 requires it to be made to SEBI through a recognised stock exchange, which examines eligibility and forwards the application with its recommendation within thirty days.
Regulation 6(2) lists ten matters SEBI may examine. Three of them decide most applications: whether the applicant is eligible for membership of a recognised stock exchange, whether it has the infrastructure to carry on the business, and whether it satisfies the net worth and deposit requirements.
Two eligibility limbs deserve attention. Regulation 6(2)(c) requires experience of at least two years in the business of trading or dealing in securities. Regulation 6(2)(h) requires certification from the National Institute of Securities Markets or such other certification as may be specified, which keeps the existing NISM examination requirement in place without naming a particular module in the regulations.
The drafting of regulation 6(2) is worth reading closely, because it is framed as matters the Board “may, in particular, examine” rather than as conditions an applicant must satisfy. Several of the limbs are also phrased as questions where the adverse answer is yes, including whether the applicant has been subject to disciplinary proceedings or enforcement action, or has an unpaid financial liability. The list therefore reads as a set of factors informing a discretionary decision rather than a checklist of absolute bars.
If registration is refused, regulation 8 requires a hearing, communication of the refusal within thirty days, and allows the applicant to apply for reconsideration within thirty days of that communication.
Two misconceptions circulate widely enough to be worth correcting. The first is that a person who has passed class ten can become a sub-broker. There is no sub-broker to become, because SEBI stopped registering the category in 2018 and closed the transition in March 2019.
The second is that authorised persons are not registered with SEBI because they have not passed an NISM examination. Authorised persons are registered, but by the exchange rather than by SEBI, which is a difference of registering authority rather than an absence of registration. The comparable position for another class of SEBI-regulated intermediary is set out in our note on SEBI’s regulatory measures for collective investment schemes.
What net worth must a stock broker maintain?
A stock broker must maintain Rs 1 crore of net worth as a trading member, Rs 5 crore as a self-clearing member, Rs 15 crore as a clearing member, and Rs 50 crore as a professional clearing member. Those figures sit in regulation 47 and vary by the capacity in which the entity operates.
The currency derivative segment carries its own figures, and commentary on this point is frequently incomplete. The footnote to the table fixes the self-clearing member requirement at Rs 5 crore and the clearing member requirement at Rs 10 crore in that segment. Most summaries report only the clearing member figure.
Two features of regulation 47 change the arithmetic. First, a variable net worth component sits alongside the base figure, and the requirement is whichever of the two is higher, though the variable component does not apply to the execution only platform segment. Its quantum is left to be specified rather than stated in the regulations. Second, regulation 47(2) requires net worth to be reckoned across all segments and all recognised stock exchanges together, not segment by segment.
The definition of base net worth excludes more than practitioners sometimes expect. Fixed assets, pledged securities, unlisted securities, bad deliveries, prepaid expenses, losses, intangible assets and 30 per cent of the value of marketable securities are all stripped out. That 30 per cent figure is an exclusion from base net worth and is distinct from the haircut applied to securities pledged to a clearing corporation, whose rate is left to be specified. The two are often reported as one.
Deposit requirements sit in regulation 48. Clearing members and self-clearing members in the equity and currency derivative segments deposit Rs 50 lakh, and the figure rises to Rs 1 crore in the electronic gold receipts segment. Trading members in the commodity derivatives segment on national exchanges deposit nil.
Fees under regulation 41 are turnover-based for brokers. Most segments attract 0.00010 per cent of turnover, which the regulation expresses as Rs 10 per crore, with interest rate derivatives at Rs 5 per crore, debt at Rs 2 per crore and agricultural commodity derivatives at Rs 1 per crore. Clearing members and self-clearing members pay a flat Rs 50,000 a year, due before 1 June, and an application for registration carries a non-refundable fee of Rs 50,000.
On late payment, regulation 44(2) provides for interest at 1 per cent per month for every month of delay or part thereof. A widely syndicated summary states this figure as 15 per cent per month, which would be 180 per cent a year and does not appear in the text. The words “or part thereof” matter in practice, because a single day of delay attracts a full month of interest.
Separately, SEBI has consulted on linking broker net worth to client base and client funds. Those are proposals and form no part of the 2026 Regulations.
Does a stock broker need a director resident in India?
A stock broker needs at least one designated director who stays in India for a total of not less than 182 days during the financial year, under regulation 6(2)(j). This is the only obligation in the 2026 Regulations that came with a transition period, and that period has now expired.
Regulation 6(3) gave brokers already registered six months from the date of notification to comply. Notification was on 7 January 2026, which placed the deadline at 7 July 2026. Much of the published commentary still describes this requirement in the future tense, using the phrase “six months from notification” without converting it to a date.
Regulation 2(1)(f) defines who can hold the role. In a company it is the managing director or a whole-time director authorised by the board; in a partnership firm the managing partner and in a limited liability partnership a designated partner; in a proprietary concern the proprietor. Where an entity falls into none of those categories, SEBI may specify who qualifies.
The obligation continues after appointment. Regulation 10(h) requires any material change in the information submitted at registration to be intimated to SEBI through the recognised stock exchange, and the explanation to that regulation lists a change in designated director among those changes. Residency is measured across the financial year, so it has to be monitored rather than confirmed once at appointment.
For brokers controlled from outside India, this converts a governance formality into a question of physical presence. A board previously staffed by visiting group executives now needs someone who is in the country for more than half the year and who carries personal accountability to SEBI for the entity’s conduct.
The absence of any other transition provision is equally significant. The eight-year retention period, the twenty-one day grievance timeline, the prohibition on accepting cash and the entire Chapter IV surveillance apparatus applied from 7 January 2026 with no run-in.
From consultation to compliance: the 2026 timeline
SEBI (Stock Brokers) Regulations, 2026: key dates and standing obligations
13 August 2025Completed
SEBI consultation paper on reviewing the 1992 Regulations
17 December 2025Completed
212th SEBI Board Meeting approves the replacement
7 January 2026Completed
Notified and in force. 1992 Regulations repealed the same day
9 January 2026Completed
Revised technical glitch framework circular issued
7 July 2026Deadline passed
Deadline for existing brokers to have a resident designated director (reg 6(3))
Regulation 6(3) required existing brokers to comply by this date. It has now passed.
Recurring obligations
Quarterly
Review of Chapter IV compliance (reg 24(1))
Half-yearly
Summary analysis and action taken report to the exchange (reg 24(3))
Annually
Review of surveillance and internal control systems (reg 23(3))
Before 1 June
Annual fee of Rs 50,000 for clearing and self-clearing members (reg 41(2))
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Client money, records and surveillance under the 2026 regulations
Client money, records and surveillance duties are concentrated in Chapters III and IV, and they are where most of the codification took place.
On client assets, regulation 18(2) requires a broker to keep client money and securities segregated from its own account and from the account of every other client, and prohibits using them for itself, for another client, or for any purpose outside those permitted. The same regulation requires adherence to client-level allocation and segregation of collateral and to the upstreaming framework.
Books and records are dealt with in regulations 15 and 16. Regulation 15 lists eleven categories of records, from the register of transactions through to client account opening forms, and permits them to be kept physically or electronically. Regulation 16 requires them to be preserved for a minimum of eight years.
The compliance officer’s reporting line is more specific than it was. Under regulation 17(2), the compliance officer must report any non-compliance observed “immediately and independently” to the recognised stock exchange. The report goes to the exchange rather than to SEBI, and the word independently means it does not pass through management first.
Chapter IV requires a broker to build systems rather than simply to behave well. Regulation 21 requires surveillance and internal control systems covering fraud or market abuse by clients as well as by directors, senior management, key managerial personnel, employees and authorised persons. Regulation 23 requires documented policies, defined roles, alert thresholds with a recorded rationale, and processes to detect potential mule accounts and suspicious activity.
Regulation 23 also restricts trading infrastructure directly. Proprietary accounts may be used only for proprietary trades, terminals may be operated only by employees and authorised persons at locations approved by the exchange, and terminals may not be used by clients in any form or manner.
The reporting cadence in Chapter IV runs on four clocks. An employee who learns of fraud, market abuse or suspicious activity must inform senior management forthwith. The broker must inform the exchange promptly on detection. Compliance with Chapter IV must be reviewed at least once each quarter, and a summary analysis with an action taken report goes to the exchange half-yearly, while the systems themselves are reviewed at least annually.
One figure in circulation does not appear in the regulations. A Big Four alert states that suspicious activity must be reported to exchanges within 48 hours. Regulation 24(2) sets the standard as “promptly” and leaves the manner to be specified. A 48-hour period may exist in a circular, but it is not an obligation under the 2026 Regulations and should not be cited as one.
Regulation 25 requires a documented whistle-blower policy with a confidential reporting channel and protection against retaliation, and routes complaints by subject: those against the board, managing director, chief executive, key managerial personnel, designated directors or the promoter go to the audit committee, and those against other employees go to the compliance officer. Regulation 26 places responsibility for enforcing the chapter on the audit committee or board.
Regulation 20 sets out what a broker may not do. It may not offer schemes of indicative, guaranteed, fixed or periodic returns that are not otherwise permitted, operate unauthorised collective investment or portfolio management schemes, or accept cash from clients either directly or by deposit into its bank account. The cash prohibition carries no threshold and closes the indirect route expressly.
The twenty-one day grievance timeline is often reported as a reduction from one month introduced in 2026. It is not. The 1992 Regulations were amended with effect from 18 August 2023 to substitute twenty-one calendar days for one month, so the 2026 instrument carries forward a timeline that had already been in force for well over two years.
Two obligations are easy to miss because of a single word each. Investor grievances must be redressed within twenty-one calendar days under regulation 10(e), and because that sits among the conditions of the certificate, a breach is a registration-condition failure rather than a conduct lapse. And regulation 18(6) requires the broker to be “continuously enrolled” on SEBI’s complaint and dispute resolution platforms, which makes lapsed enrolment an ongoing breach rather than an administrative oversight. Whether enrolment on both platforms is required, or enrolment on one suffices, is not resolved cleanly by the drafting.
The wider compliance architecture these duties sit within is set out in our note on the impact of financial regulation on corporate compliance and risk management.
Can stock brokers sell insurance and other financial products?
Stock brokers can carry on activities regulated by the insurance, banking and pension regulators, and regulation 12 is the provision that permits it. It is also the provision most often described inaccurately.
The regulation has two sub-regulations and an explanation. Sub-regulation (1) provides that a broker may carry out an activity under the regulatory framework of another financial sector regulator or specified authority in the manner as may be specified by the Board. Sub-regulation (2) provides that the activity falls under the purview of that regulator. The explanation defines a financial sector regulator to include the Reserve Bank of India, the Insurance Regulatory and Development Authority of India, the Pension Fund Regulatory and Development Authority, the International Financial Services Centres Authority, the Ministry of Corporate Affairs and the Insolvency and Bankruptcy Board of India, and allows SEBI to specify others.
That is the whole regulation. It contains no requirement of prior SEBI approval, no ring-fencing condition, no obligation to house the activity in a separate business unit, and no conflict-management protocol. Commentary asserting those conditions is describing prudent practice rather than the notified text.
The contrast within the instrument makes the point. Where the drafter wanted prior approval, it said so: regulation 10(c) requires a broker to obtain the prior approval of the Board, by application through a recognised stock exchange, for any change in control. Regulation 12 uses no comparable language. Conditions may still arrive, because the words “in the manner as may be specified” leave room for them, but they are not in force today.
Incidental advice is dealt with separately. Regulation 13 permits a broker to give incidental investment advice to its broking clients, provided it complies with Chapter III of the SEBI (Investment Advisers) Regulations, 2013, which brings in suitability, risk profiling, disclosure and record-keeping duties. No separate registration as an investment adviser is required for advice that is incidental to broking. Advisory work that goes beyond the incidental is a different matter and continues to require registration as an investment adviser in its own right.
Underwriting carries limits that commentary has largely passed over. Under regulation 14, a broker may act as an underwriter only out of its own net worth or funds as may be specified, its total underwriting obligations across all agreements may not exceed twenty times its net worth, and it must subscribe within forty-five days of being called upon to do so.
One interaction is worth planning for. Where a broker in the debt segment is also regulated by another sectoral regulator, the explanation to regulation 47 requires net worth to be computed under whichever method produces the higher figure. A broker expanding into another regulator’s territory may therefore find its SEBI net worth requirement determined elsewhere. For readers weighing where these cross-regulated roles sit as a career, Skill Arbitrage has a useful overview of investment banking as a career path.
Do existing registrations survive the SEBI (Stock Brokers) Regulations, 2026?
Existing registrations survive the SEBI (Stock Brokers) Regulations, 2026 intact, because the repeal changed the source of a broker’s obligations without disturbing its registration. Regulation 51(1) repeals the 1992 Regulations from the commencement of the new instrument, and regulation 51(2) then saves almost everything done under them.
The savings are broad. Registrations granted, approvals given, fees collected, suspensions and cancellations, inspections, adjudications, enquiries, investigations and show cause notices issued under the old regulations are all deemed to have been done under the corresponding provisions of the new ones. Applications pending on 7 January 2026 are treated as having been made under the new regulations. Accrued rights, privileges, obligations, liabilities and penalties are unaffected.
The practical answer to the question most often asked is therefore short. No existing broker had to re-register, no certificate lapsed, and no pending enforcement proceeding fell away.
One question the text does not answer cleanly is what became of the circulars. Regulation 51(2) saves actions and proceedings; it does not mention circulars, guidelines or directions. Regulation 51(3) provides that a reference to the 1992 Regulations in any other regulation, guideline or circular is to be read as a reference to the corresponding provision of the new ones, which is a rule for reading existing documents rather than a provision keeping them in force.
The distinction matters because the 2026 framework delegates heavily. The phrase “as may be specified” appears throughout, and much of the operative detail on client funds, cyber security and surveillance still sits in circulars issued under the repealed instrument. The better view is that those circulars continue, since regulation 51(3) would otherwise have nothing to operate on, but the instrument does not say so expressly.
A second gap sits in regulation 3(4), which applies Chapters II, III, V, VI and VIII to clearing members with the necessary modifications, other than regulations 13, 14, 15(5) and 19. Chapter IV, the fraud and market abuse mechanism, is not in that list and contains no separate application provision of its own.
A third area is simply unwritten. Execution only platforms are exempted from the eleven-category books requirement, exempted from the variable net worth component, and left with fees and deposits to be specified. That perimeter awaits a circular.
None of this is peculiar to broking. The same Board meeting approved a comparable rewrite of the mutual funds regulations and amendments to the issue of capital, listing obligations and non-convertible securities frameworks, which places the broker rewrite inside a wider simplification programme rather than a broker-specific tightening. Our note on the SEBI (Buy-Back of Securities) Amendment Regulations 2026 covers another instrument from the same period, and LawSikho’s analysis of the SEBI ICDR amendment of 2026 covers a third.
Frequently asked questions
Do existing stock brokers need to re-register under the SEBI (Stock Brokers) Regulations, 2026?
No. Regulation 51(2) deems registrations granted under the 1992 Regulations to have been granted under the corresponding provisions of the 2026 Regulations. Certificates remain valid and no fresh application was required.
When did the SEBI (Stock Brokers) Regulations, 2026 come into force?
On 7 January 2026, the date of their publication in the Official Gazette. The 1992 Regulations were repealed on the same date.
By when did existing brokers have to appoint a resident designated director?
By 7 July 2026. Regulation 6(3) allowed six months from the date of notification for brokers already registered to comply with regulation 6(2)(j).
Who counts as a designated director?
Under regulation 2(1)(f), the managing director or an authorised whole-time director of a company, the managing partner of a partnership firm, a designated partner of a limited liability partnership, or the proprietor of a proprietary concern. SEBI may specify who qualifies for entities outside these categories.
What is the minimum net worth for a stock broker in India?
Rs 1 crore for a trading member, Rs 5 crore for a self-clearing member, Rs 15 crore for a clearing member and Rs 50 crore for a professional clearing member. In the currency derivative segment the self-clearing member figure is Rs 5 crore and the clearing member figure is Rs 10 crore. A variable net worth component may apply, and the higher of the two figures governs.
How much does it cost to apply for registration as a stock broker?
The application fee under regulation 41(3) is Rs 50,000 and is non-refundable. Annual fees for brokers are turnover-based, and clearing members and self-clearing members pay Rs 50,000 a year.
What happens if a broker pays its fees late?
Regulation 44(2) charges interest at 1 per cent per month for every month of delay or part thereof. Because of the words “or part thereof”, a delay of one day attracts a full month of interest.
How long must a stock broker preserve its books of account?
Eight years, under regulation 16. This applies to all the record categories listed in regulation 15.
How many days does a broker have to redress an investor grievance?
Twenty-one calendar days from receipt of the complaint, under regulation 10(e). The timeline is a condition of the certificate of registration.
Is prior experience required to register as a stock broker?
Regulation 6(2)(c) refers to experience of at least two years in the business of trading or dealing in securities. It sits among the matters SEBI may examine when considering an application rather than among absolute disqualifications.
Does a registered stock broker need a separate registration to act as a clearing member?
No. Under regulation 3(1) a registered broker may act as a clearing member in any segment subject to the approval of the clearing corporation, and regulation 3(2) applies the same rule in reverse.
Can a stock broker give investment advice to its clients?
Yes, where the advice is incidental to broking and given to its broking clients. Regulation 13 requires compliance with Chapter III of the SEBI (Investment Advisers) Regulations, 2013, but does not require separate registration as an investment adviser.
Can stock brokers now undertake insurance, pension or lending activities?
Regulation 12 permits a broker to carry on activities regulated by another financial sector regulator, including the Reserve Bank of India, the Insurance Regulatory and Development Authority of India and the Pension Fund Regulatory and Development Authority. The activity falls under that regulator’s purview, and SEBI may specify the manner in which it is carried on.
What is the difference between a sub-broker and an authorised person?
There is no longer a difference, because the sub-broker category no longer exists. SEBI stopped registering sub-brokers in 2018 on the ground that the two roles were operatively the same, and existing sub-brokers moved to authorised person or trading member status by 31 March 2019. An authorised person is registered with the exchange rather than with SEBI.
How can an investor check whether a broker is registered with SEBI?
SEBI publishes a searchable list of registered intermediaries on its website, and each recognised stock exchange publishes its member list. A broker’s registration number should also appear on its contract notes and on its website.
References
Regulations and primary sources
- SEBI (Stock Brokers) Regulations, 2026, notification SEBI/LAD-NRO/GN/2026/291, Gazette of India, Extraordinary, Part III, Section 4, No. 16, dated 7 January 2026
- SEBI (Stock Brokers) Regulations, 1992, as last amended on 10 February 2025, repealed with effect from 7 January 2026
- SEBI circular on the role of the sub-broker vis-a-vis the authorised person, 3 August 2018
- SEBI circular on upstreaming of client funds by stock brokers and clearing members to clearing corporations, June 2023
- SEBI ex-parte ad-interim order in the matter of client securities misuse, 22 November 2019
- SEBI Act, 1992, Section 12(1)
- SEBI (Intermediaries) Regulations, 2008, Schedule II
- SEBI (Investment Advisers) Regulations, 2013, Chapter III
- SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, regulation 2(1)(e)
- SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003
Case law
- Securities and Exchange Board of India v. National Stock Exchange Members Association, Supreme Court of India, Civil Appeal No. 435 of 2007 (with C.A. Nos. 5076 of 2007 and 3003 of 2011), decided 13 October 2022, Ajay Rastogi and B.V. Nagarathna, JJ. Reported as 2022 LiveLaw (SC) 840.
This article is for informational and educational purposes only and does not constitute legal advice. For advice on a specific registration or compliance question, consult a qualified professional.
