SEBI to drop word 'penalty' in its actions against brokers
What's the story
The Securities and Exchange Board of India (SEBI) is considering removing the term "penalty" for its actions against brokers. The move is aimed at reducing the stigma associated with the word, K C Varshney, a whole-time member of SEBI, said today. Varshney questioned the appropriateness of using "penalty" in these cases, saying, "You know many of these are not actually penalty. And unnecessarily it is a stigma on the broker when it is imposed."
Industry discussions
ISF has been discussing these issues
The Industry Standard Forum (ISF) has been actively discussing issues related to the broking industry for the past five months. Varshney said a consensus was reached on some contested issues during a recent meeting in New Delhi. The meeting was attended by brokers, NSE and SEBI officials, and an announcement is expected soon regarding these developments.
Future plans
One exchange will be made the nodal authority
Apart from changing the nomenclature and rationalizing penalties, SEBI is also planning to make one exchange the nodal authority for imposing penalties. Varshney said there are also plans to introduce a system where brokers can share their data on a single portal instead of multiple ones. This would simplify processes and improve efficiency in the broking industry.
Government collaboration
SEBI working with Finance Ministry
Varshney revealed that SEBI is working with the Finance Ministry on other aspects to make business easier for the broking industry. He welcomed the launch of a new facility on both CDSL and NSDL, saying investors can now read every opinion of proxy advisory firms and vote accordingly. This development is seen as a major step forward for corporate governance.