Mumbai: Market regulator Securities and Exchange Board of India (Sebi) on Wednesday decided to grant a unified licence to brokers and clearing members to operate in commodity derivative as well as equity markets.
The board of Sebi has approved a proposal for integration of stock brokers in equity and commodity derivative space. 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. 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 with 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.
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".