SEBI said the aim is to reduce costs, ease business and ensure robust investor protection
SEBI has proposed a major overhaul of rules for stockbrokers, including easing compliance and aligning to the Companies Act.
The regulator has proposed a formal definition of “algorithmic trading” as the current regulations don’t include the term, despite the growing share of such trades in the market.
In order to simplify regulatory language and remove ambiguity, it proposes to define “execution-only platforms” — online platforms that facilitate subscription, redemption and switching in direct plans of mutual funds. SEBI also suggested definitions for “proprietary trading,” to clearly distinguish between a broker’s own trades and those executed for clients.
Shares of listed brokerages surged during the day following the regulator’s draft proposals. Angel One, Motilal Oswal, Nuvama Wealth, IIFL Capital and the BSE were among the top gainers, with the Nifty Capital Market index climbing over 2 per cent, most constituents in the green.
Currently, such activities are covered under broad guidelines and circulars that are legally binding and issued whenever needed, but SEBI now aims to provide a more formal structure.
The proposals seek to streamline the framework by aligning sub-regulations, eliminating redundancies and harmonising provisions across different intermediary regulations. SEBI said the aim is to reduce costs, ease business and ensure robust investor protection.
SEBI has suggested permitting stock brokers to access the Negotiated Dealing System–Order Matching (NDS-OM) platform for trading in government securities and to operate in Gift-IFSC through a separate unit. Currently, the NDS-OM is mainly available to banks and primary dealers.
SEBI plans to omit outdated provisions and introduce changes that reflect current market and technological developments. It has invited public comments on the draft proposals by September 3.
Published on August 13, 2025
