SEBI tightens the noose on stock brokers, now they will not be able to manipulate the market

 

SEBI New Rules: The brokerage company and its senior management will be in charge of identifying and stopping market abuse and fraud, per the SEBI notice. A whistleblower policy for staff members and other interested parties must be established by the stock brokerage business in order to stop suspected fraudulent, improper, or unethical activity.

SEBI New Rules: Stock brokers who manipulate the stock market now face stiffer penalties from the Securities and Exchange Board of India (SEBI). A new rule for brokerage firms and stock brokers has been notified by the market authority in response to this. However, SEBI has not yet established any regulations to stop stock brokers from abusing the market. To control stock brokers, SEBI has implemented stringent measures for the first time. Brokers and brokerage firms would bear responsibility for any market disruption, under the recently announced rule by SEBI. Within 48 hours, they must notify SEBI of the manipulation of the market.

Brokerage firms bear the responsibility in the event of market manipulation.

In accordance with the SEBI notification, the brokerage business and its senior management will be in charge of identifying and stopping market abuse and fraud under the institutional framework designed for brokers. Brokerage companies will need to set up a robust monitoring and control system in order to achieve this. In addition, a mechanism for accurate deal augmentation and reporting will be developed for stock brokers.

SEBI tightens the noose on stock brokers, now they will not be able to manipulate the market 2024 https://t.co/gvuNioZ8YM

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Brokers must take action to stop market manipulation.

In its notification, SEBI also included a list of potential instances of market fraud or abuse, which the brokers system must keep an eye on. A false impression of the transaction, price manipulation, front running (gaining an advantage based on confidential knowledge), insider trading, incorrect selling, and unapproved transactions are examples of potential scenarios.

Stock brokers will provide 48 hours' notice to SEBI.

In a notice published on June 27, SEBI requested that stock brokers notify the stock markets as soon as they discover any suspicious conduct, no later than 48 hours. In addition, businesses will be required to produce a "zero report" every six months if there are no incidents of fraud, market abuse, or suspicious conduct, along with a summary analysis and action report on those cases.

Brokerage firms will need to create policies regarding whistleblowers.

The stock brokerage business is required by the SEBI announcement to create and execute a "whistleblower" policy, which offers a private channel for staff members and other interested parties to voice concerns about suspected fraudulent, inappropriate, or unethical activity. Procedures for ensuring the "whistleblower" has appropriate protection should be outlined in the policy. The Prohibition of Fraud and Unfair Trading Practices (PFUTP) and stock broker standards were modified by SEBI in order to implement these modifications, and they are now in effect as of June 27.

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