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SEBI Eases Tech Glitch Rules, 60% Brokers Exempt from Compliance

The Securities and Exchange Board of India (SEBI) has announced a major revision to its framework for handling technical glitches in brokers' electronic trading systems. The new rules now only apply to brokers with over 10,000 registered clients, exempting approximately 60% of firms from the compliance net. SEBI has introduced several exemptions, particularly for glitches occurring outside a broker's own architecture or those with negligible impact. The overhaul also simplifies reporting by extending deadlines and streamlining the process through a single platform.

Key Points: SEBI Exempts 60% Brokers from Tech Glitch Framework

  • Exempts ~60% of stock brokers
  • Extends glitch reporting time to 2 hours
  • Introduces exemptions for external/negligible glitches
  • Rationalizes financial disincentives
2 min read

SEBI introduces exemptions from technical glitch framework, drops 60% firms from compliance net

SEBI overhauls technical glitch rules, exempting 60% of brokers and simplifying reporting to ease compliance burden for market intermediaries.

"The glitches which are taking place outside the stock brokers' trading architecture... have been exempted - SEBI"

Mumbai, January 9

The Securities and Exchange Board of India on Friday announced a major overhaul of its framework for addressing technical glitches in stock brokers' electronic trading systems, aiming to reduce compliance burden and improve ease of doing business for market intermediaries.

The framework is now applicable to stock brokers having more than 10,000 registered clients. As a result of new eligibility criteria approximately, 60% of stock broker would be moving out of this framework and consequently reduce their overall compliance requirement, SEBI said.

The revised framework simplifies the reporting requirement by providing the extension of time for reporting of technical glitches (from one hour to two hours), consideration to the trading holiday's while submitting reports and streamlining the reporting requirement from reporting to all the exchanges to a single reporting platform (i.e. Common Reporting Platform).

SEBI has introduced several exemptions from the technical glitch framework.

"The glitches which are taking place outside the stock brokers' trading architecture, glitches that don't directly affect the trading functionality and those which have negligible impact have been exempted from the technical glitch framework," SEBI said in a statement.

This results into immunity to the stock brokers from the glitches which are out of control of the stock brokers & which do not affect the ability of the stock broker to provide seamless services, it read.

SEBI also rationalised the technology compliance requirement based on the size of the stock brokers and their technology dependency. Such as rationalisation in Capacity planning and DR drill requirement etc.

The financial disincentive structure in the revised framework has been rationalised considering the applicable exemptions, type of glitches (major or minor) and the frequency of the occurrences etc, it said.

- ANI

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Reader Comments

R
Rohit P
As a retail investor, my main concern is still protection. Exempting glitches that "don't directly affect trading functionality" sounds vague. What if it affects my ability to see my portfolio or place orders correctly? The intent is good, but execution details matter.
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Aman W
Finally some rational thinking! The old one-hour reporting window was too tight, especially during volatile market hours. Extending it to two hours and considering trading holidays is a practical relief for tech teams. Ease of doing business in action.
S
Sarah B
Interesting to see the regulator tailoring rules based on broker size and tech dependency. A one-size-fits-all approach never works well. This should help smaller Indian fintech startups compete without being bogged down by compliance meant for giants.
K
Karthik V
Reducing the burden for 60% of brokers is a big number. Hope this doesn't lead to complacency on tech infrastructure. "Negligible impact" needs to be clearly defined to prevent misuse. Overall, a step in the right direction for our markets.
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Nikhil C
Good move. The common reporting platform alone will save so much time and duplicate work. Now brokers can focus on fixing issues instead of filing reports to multiple exchanges. Thoda toh relief mila! 😅

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