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Informist, Friday, Aug. 7, 2026

 

MUMBAI – The National Stock Exchange has issued a consultation paper proposing major changes in the regulatory framework to strengthen supervision of authorised persons. The proposals have been prepared jointly by the NSE and BSE in consultation with the Securities and Exchange Board of India, according to the paper dated Thursday. NSE has sought comments and suggestions on the consultation paper by Aug. 27.

 

Under the proposed framework, those seeking to become authorised persons will have to meet stricter eligibility criteria, including minimum net worth requirements, mandatory certifications from the National Institute of Securities Markets, and educational qualifications. According to the proposal, the authorised person must have a valid NISM Series VII (Securities Operations and Risk Management) certification, NISM certification for the business segments for which the person is to be registered, and NISM Series-XXIV certification either within six months from registration or from the date of issuance of the guidelines, whichever is later.

 

Individual authorised persons must have a net worth of at least INR 500,000 and non-individual authorised persons, including body corporates, partnership firms, and limited liability partnership companies must have a net worth of INR 2.5 million. In addition, authorised persons must maintain a minimum deposit of INR 100,000 with the stockbroker. 

 

The framework also seeks tighter compliance requirements for authorised persons. They must disclose all bank and dematerialised accounts to members at the time of onboarding, along with the last six months' bank and demat account statements. They also cannot receive client funds or securities in their own accounts. Stockbroking firms are also expected to conduct social media screening of authorised persons and their promoters, directors, or partners.

 

Authorised persons with trading terminals must have appropriate technological controls such as geotagging to monitor and restrict misuse of terminal access. The location where the terminal is accessed shall be under closed circuit television monitoring, according to the proposed framework. They must also implement face recognition or biometric authentication technology for accessing terminals at their location.

 

Under the proposed framework, stockbrokers will be responsible for all acts of omission and commission of their authorised persons and employees and shall be liable for all consequences, obligations, and liabilities arising from there. They should also conduct regular inspections and unannounced audits, including third-party external inspections as mandated by the exchanges, and maintain proper records. 

 

For withdrawal of registration of an authorised person, both the authorised person and the stockbroker may mutually agree to withdraw their association after giving notice to the other party as per the terms specified in the agreement executed between them. If an authorised person wishes to deregister and does not receive cooperation from the stockbroker who is inactive or disabled, then the authorised person may directly approach the exchange, according to the consultation paper.  End

 

Reported by Arya S. Biju

Edited by Shubhayan Bhattacharya

 

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