Sebi Mulls Online Registration for Market Entities

Markets regulator Sebi plans to soon introduce a paperless online mechanism for registration as brokerage firms.

Published: 24th April 2016 07:57 PM  |   Last Updated: 24th April 2016 07:57 PM   |  A+A-


The main focus of the exhibition will be to caution the public at large against illegal money mobilisation schemes through a variety of activity | File Reuters


NEW DELHI: To make it easier to do business, markets regulator Sebi plans to soon introduce a paperless online mechanism for registration as brokerage firms, mutual funds, portfolio managers and other market intermediaries.

The proposed paperless mechanism will also be made available for submission of inspection and action taken reports, periodic filings and payment of fees for all kinds of market intermediaries, a senior official said.

So far, the Securities and Exchange Board of India (Sebi) has implemented online registration mechanism for commodity derivative brokers and a similar system is underway for equity market brokers, while such facilities would be extended for all kinds of market intermediaries soon, he added.

The proposed system would help make it easier for the existing and new market intermediaries to complete their registration and other regulatory filings with Sebi much faster and in a cost-effective way.

The entities that need to get registered with Sebi to do business include brokers, merchant bankers, debenture trustees, mutual funds, domestic and foreign portfolio managers, rating agencies, registrar and share transfer agents, alternative investment funds, depository participants, investor associations, research analysts, venture capital funds and collective investment schemes, among others.

It is mandatory for such entities to get registered with Sebi before doing business to ensure that the investors' interest is safeguarded.

The proposed online system is part of Sebi's Plan of Action for this financial year 2016-17, during which the regulator also intends to conduct a review of its fee structure for various intermediaries, which could be possibly a downward revision.

At its last meeting, Sebi's board was informed that the regulator has been "following the practice of calibrating the fees as per Sebi's requirements from time to time".

"The guiding principle has been to meet the revenue expenditure from the fees collected annually. There have been instances when the fees have been reduced by Sebi if there is enough surplus. The Board was informed that the next such exercise would be undertaken in 2016-17," a senior official said.

Sebi is estimated to have earned an income of about Rs 350 crore in fees from intermediaries during 2015-16, which it expects to rise to Rs 393 crore in the current fiscal largely due to increase in the number of entities.

At the same time, its total revenue expenditure, including establishment and other administrative expenses, is also expected to rise to Rs 370 crore, from Rs 357 crore in the previous fiscal.

After taking into account the income from investments and other heads, Sebi expects to the end the current fiscal with a surplus on revenue account of Rs 176 crore, as against Rs 179.35 crore in the previous year.

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