(Eds: Updating with Sebi chief Ajay Tyagi’s comments) Mumbai, Apr 26 (PTI) Market regulator Sebi today decided to grant a unified licence to brokers and clearing members to operate in commodity derivative as well as equity markets. Also Read - Sahara's Subrata Roy Must Pay Rs 62,600 Crore or Spend His Time in Jail: SEBI to Supreme Court
The board of Sebi has approved a proposal for integration of stock brokers in equity and commodity derivative space. Also Read - SEBI Move on DMA Will Affect Stock Brokers
Following this, a broker or clearing member dealing in the securities markets will be allowed to buy, sell or deal in commodity derivatives without setting up a separate entity and vice-versa. Also Read - SEBI Extends Compliance Deadline For Municipal Bond Issuers
To enable the integration, Sebi will amend norms pertaining to stock broker and securities contract regulations, the regulator said in a statement after the first board meeting under Ajay Tyagi as chairman.
“The integration of stock brokers in equity and commodity derivative markets while having many synergies in terms of trading and settlement mechanism, risk management, redressal of investor grievances, etc would benefit investors, brokers, stock exchanges and Sebi,” the regulator said.
Besides, it will increase economic efficiency in terms of meeting operational and compliance obligations at the member level, potentially resulting in ease of doing business.
Also, the integration will help in widening market penetration and facilitate effective regulatory oversight by stock exchanges and Sebi.
Tyagi said threshold requirement for both equity and commodity brokers will remain the same.
“One difference is that right now, they need two separate subsidiary to deal with, but now they would have to have same subsidiary, same entity to deal with any security,” he told reporters here after the board meeting.
Net worth requirement will be same and there will not be any differentiation, he added.
Earlier, Finance Minister Arun Jaitley, in his budget speech for 2017-18, had announced that the “commodities and securities derivative markets will be further integrated by integrating the participants, brokers, and operational frameworks”.
This is published unedited from the PTI feed.