Securities and Exchange Board of India Chairman Tuhin Kanta Pandey, SEBI Whole Time Member Kamlesh Chandra Varshney, NSDL Managing Director and CEO Vijay Chandok, and others in a group picture during the launch event of ‘Proxy Advisory Recommendations’ on Investor App, in Mumbai on Monday
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ANI
The Securities and Exchange Board of India (SEBI) is planning to rationalise penalties imposed on stock brokers by exchanges, including renaming these ‘penalties’ as they unnecessarily become a stigma, said whole-time member Kamesh Varshney on Monday.
Speaking at the launch of a proxy advisory recommendations feature on the e-voting system in NSDL and CDSL’s investor apps, Varshney said many of these actions are not actually a penalty. “The most important point was that, should we call it a penalty? Many of these are not actually penalties. And unnecessarily, it is a stigma on the broker when it is imposed.”
The regulator is working towards making one exchange the designated authority for imposing penalties on stock brokers. This would cap the number of times an errant broking entity can be penalised for the same violation by exchanges.
Brokers’ ease
Currently, for a single violation, the penalties imposed could be more than one as most broking firms are members of all the exchanges in the equity and commodity space. The broker’s industry standard forum (ISF) has been working on these issues in the broking industry over the last five months.
Last Saturday in a meeting between brokers, NSE and SEBI officials in New Delhi, a consensus was reached on solutions to some of the issues. “Each one of us is satisfied that now, work can move forward. And at least the first phase of this rationalisation should happen very soon,” Varshney said.
SEBI also plans to introduce a common reporting portal where brokers can share data on their transactions. It is also working on a dedicated portal for registrations and approvals to be taken by brokers. A common portal for the different exchanges is also in the works, the WTM said.
SEBI is also in discussion with the Finance Ministry on other aspects of the ease of doing business for the broking industry, he said.
Proxy recommendations
The new feature launched on Monday is expected to help individual investors to exercise their rights in a more effective and efficient manner, as well as check corporate governance by ensuring shareholders’ say.
“By offering independent, research-based insights on shareholder resolutions, proxy advisory firms facilitate more informed decision-making, particularly for retail investors who may lack resources for in-depth analysis,” SEBI Chairman Tuhin Kanta Pandey said at the launch.
The feature integrates research-backed recommendations from proxy advisory firms directly into the e-voting platform used by retail investors.
Published on July 7, 2025
