SEBI Proposes Easing Reporting Norms for Brokers; Relief Extended to Primary Dealers

SEBI Proposes Easing Reporting Norms for Brokers; Relief Extended to Primary Dealers

This article is based on SEBI’s draft circular reported by Moneycontrol on February 13, 2026.

is article is based on SEBI’s draft circular reported by Moneycontrol on February 13, 2026.

The Securities and Exchange Board of India (SEBI) has proposed significant relaxations in bank account and demat account reporting requirements for stock brokers, extending long-awaited relief to primary dealers. The proposal forms part of SEBI’s broader ease of doing business and regulatory efficiency initiative.

A draft circular, issued for public comments, seeks to reduce the compliance burden on intermediaries while ensuring that supervisory oversight remains intact.

Background of the Proposal

Under the existing regulatory framework, stock brokers are required to:

· Name and tag all bank accounts and demat accounts

· Report details of such accounts to stock exchanges

While brokers that are banks already enjoy certain relaxations, primary dealers were not explicitly aligned with these exemptions. Stock exchanges made representations to SEBI seeking parity and simplification, leading to the current proposal.

Key Proposals in the Draft Circular

Relaxation in Demat Account Tagging

· The requirement to tag demat accounts will not apply to accounts used exclusively for activities other than stock broking

· This applies to brokers who are also primary dealers

Impact:Demat accounts maintained for treasury operations or non-broking activities will no longer fall under routine reporting obligations.

Limited Reporting of Bank Accounts

SEBI has proposed that:

“A stock broker which is also a bank or primary dealer shall be required to report to the stock exchanges only those bank accounts that are used for their stock broking activities.”

Impact:Brokers who are banks or primary dealers will not need to report all operational or treasury accounts—only those directly linked to stock broking.

Shift in Demat Reporting Mechanism

· Certain broker-level demat reporting provisions are proposed to be deleted

· Instead, depositories will directly share:

· Details of demat accounts opened or closed by brokers

· Information with stock exchanges

· The periodicity and mechanism of sharing will be jointly decided by:

· Stock Exchanges

· Depositories

Impact:This removes duplication, improves data accuracy, and streamlines regulatory reporting.

Continued Disclosure Obligation for Bank Accounts

Despite relaxations, brokers must still:

· Intimate stock exchanges within one week

· Of opening or closing bank accounts used for stock broking

This ensures real-time supervisory oversight remains unaffected.

 Regulatory Intent Behind the Move

SEBI has clarified that the proposed changes aim to:

· Harmonise the reporting framework for:

· Brokers

· Banks

· Primary dealers

· Reduce unnecessary compliance burden

· Improve regulatory efficiency

· Retain adequate market supervision

This reflects a balanced regulatory approach—simplification without dilution of investor protection.

 Why This Matters for Compliance Professionals & Company Secretaries

For Company Secretaries, compliance officers, and intermediaries, this proposal is important because:

· It reduces repetitive and non-value-adding compliance work

· Clarifies ambiguities for brokers acting as primary dealers

· Reinforces SEBI’s shift towards technology-driven supervision

· Requires careful review of:

· Account classification

· Internal compliance SOPs

· Reporting timelines

Company Secretaries advising brokers and intermediaries should re-evaluate compliance frameworks once the circular is finalised.

 Public Comments Invited

SEBI has invited public comments on the draft circular up to March 6, 2026. Stakeholders, including market intermediaries and professionals, are encouraged to submit their feedback.

 Conclusion

SEBI’s proposal to ease reporting norms marks another step towards regulatory rationalisation in India’s capital markets. By aligning exemptions for brokers, banks, and primary dealers, the regulator aims to reduce friction while preserving transparency and oversight.

Once notified, the changes are expected to significantly ease operational compliance for intermediaries without compromising investor protection.

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