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The Securities and Exchange Board of India (Sebi) has relaxed reporting requirements for stock brokers by removing the need to report demat accounts and easing bank account disclosure norms. The move is aimed at improving efficiency and reducing compliance burden. Brokers that are also banks or primary dealers will now report only relevant accounts linked to broking activities. Depositories will share demat account data with exchanges instead. While timelines and penalties remain, the revised framework is expected to streamline operations and support ease of doing business.
The Securities and Exchange Board of India has introduced changes to simplify reporting requirements for stock brokers, removing the mandatory requirement to report demat accounts and easing rules related to bank account disclosures. Advertisement
The regulator stated that the objective is to improve regulatory efficiency and reduce the compliance burden on brokers, especially those operating in multiple capacities such as banks or primary dealers. The revised framework aims to align reporting requirements more closely with actual business usage while maintaining necessary oversight.
As per the new rules, stock brokers that are also banks or primary dealers will now be required to report only those bank accounts that are used specifically for stock broking activities. Earlier, a broader set of accounts had to be reported, which increased compliance requirements even for accounts not directly linked to broking operations.
In terms of demat accounts, brokers will continue to maintain proper tagging for identification and regulatory purposes. However, this requirement will not apply to demat accounts used exclusively for non-broking activities in the case of brokers who are also primary dealers. This brings clarity and avoids overlap in reporting across different business functions.
A significant change is the removal of the requirement for brokers to directly report their demat accounts to stock exchanges. Instead, depositories will now provide details of demat accounts opened or closed by brokers to the exchanges. The mechanism for this data sharing will be jointly finalised between depositories and stock exchanges, ensuring consistency in reporting without duplication.
Despite these relaxations, certain compliance requirements remain in place. Brokers must continue to inform stock exchanges about the opening or closure of bank accounts within seven working days. This ensures that exchanges have updated information about operational accounts relevant to trading activities.
The regulator has also made it clear that non-compliance related to the naming and reporting of bank accounts, as well as the nomenclature of demat accounts, will attract penal action as per the rules of stock exchanges and depositories. This indicates that while reporting has been simplified, accountability standards remain unchanged.
These changes are part of Sebi's ongoing efforts in recent years to streamline regulatory processes and reduce unnecessary compliance layers while maintaining transparency and control within the capital markets ecosystem.
The revised provisions will come into effect from April 17, 2026.
Source PTI
FAQ
Q1: What changes has Sebi made to reporting norms for brokers?
The Securities and Exchange Board of India (Sebi) has simplified reporting requirements by removing the need for brokers to report demat accounts and easing bank account disclosure rules. The changes aim to reduce compliance burden while maintaining regulatory oversight.
Q2: What is the new rule regarding bank account reporting?
Under the revised norms, brokers who are also banks or primary dealers are required to report only those bank accounts that are specifically used for stock broking activities. This avoids unnecessary reporting of unrelated accounts.
Q3: Do brokers still need to report demat accounts?
No, brokers are no longer required to directly report demat accounts to stock exchanges. Instead, depositories will now share details of demat accounts opened or closed with exchanges, reducing duplication in reporting.
Q4: What changes have been made for demat accounts used for non-broking activities?
Demat accounts used exclusively for non-broking purposes, especially by brokers who are also primary dealers, are now excluded from reporting requirements. However, proper tagging and identification of relevant accounts will still be maintained.
Q5: Are there any compliance requirements that still remain?
Yes, brokers must continue to inform stock exchanges about the opening or closure of bank accounts within seven working days. This ensures that exchanges have updated information about accounts linked to trading activities.
Q6: Will there be penalties for non-compliance under the new rules?
Yes, Sebi has clarified that non-compliance related to account naming, reporting, and demat account classification will attract penalties as per exchange and depository regulations.
Q7: When will these revised norms come into effect?
The new reporting framework introduced by Sebi will come into effect from April 17, 2026, and is expected to improve ease of doing business while maintaining transparency in the system.
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