Securities and Exchange Board of India (Stock Brokers) Regulations, 2026

143 GI/2026 (1) REGD. No. D. L.-33004/99 xxxGIDHxxx xxxGIDExxx EXTRAORDINARY PART III—Section 4 PUBLISHED BY AUTHORITY Securities and Exchange Board of India Mumbai, January 7, 2026 Securities and Exchange Board of India (Stock Brokers) Regulations, 2026 Regulations to consolidate the regulatory requirements relating to the registration of Stock Brokers and Clearing Members (Clearing Members), to determine their duties and liabilities and responsibilities, and to provide for matters connected therewith or incidental thereto. F. No. SEBI/LAD-NRO/GN/2026/291.—In exercise of the powers conferred by Section 11(2) read with Section 12 and Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) [hereinafter referred to as the SEBI Act, 1992], the Board hereby makes the following regulations, namely:

Chapter – I Preliminary

Short title and commencement

1. (1) These regulations may be called the Securities and Exchange Board of India (Stock Brokers) Regulations, 2026. (2) These regulations shall come into force on the date of their publication in the Official Gazette. No. 16] NEW DELHI, WEDNESDAY, JANUARY 7, 2026/PAUSHA 17, 1947 CG-MH-E-07012026-269177

THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]

Definitions 2. (1) In these regulations, unless the context otherwise requires:— (a) "Act" means the Securities and Exchange Board of India Act, 1992 (15 of 1992); (b) "Certificate" means the registration certificate issued by the Board; (c) "Change in Control"— (i) in the case of a body corporate, shall be construed in the context of the definition of control given in Regulation 2(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, if the shares of such body corporate are listed on any recognized stock exchange; (ii) in the case of a body corporate, shall be construed in the context of the definition of control given in Section 2(27) of the Companies Act, 2013 (18 of 2013), whether the shares of such body corporate are listed on any recognized stock exchange or not; (iii) in the case of any person other than a body corporate, shall mean any change in the manner in which the control has been exercised or in the beneficial ownership or in the controlling interest; Explanation – For the purposes of sub-clause (iii), the expression "controlling interest" means— fifty percent or more of the voting rights or interest [whether directly or indirectly]; (d) "Clearing Corporation" shall have the same meaning as assigned to it in Regulation 2(1)(d) of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018; (e) "Clearing Member" means a person who has the right to clear and settle trades with any recognized clearing corporation; (f) "Designated Director" means a person who has been designated as such by a stock broker or clearing member, and includes— (i) in the case of an entity being a company, its Managing Director or Whole-time Director, as authorized by the Board of Directors; (ii) in the case of an entity being a partnership firm, its Managing Partner, and in the case of an entity being a Limited Liability Partnership, its Designated Partner; (iii) in the case of an entity being a proprietorship concern, its Proprietor; and (iv) in the case of a stock broker or clearing member not falling under any of the above categories, any other person or persons as may be specified by the Board; (g) "Execution Only Platform" means any digital or online platform through which money can be invested (subscribed) in a direct plan of any scheme of a mutual fund, withdrawn (redeemed) from such scheme, and transferred from one scheme to another (switched); (h) "Firm" means a firm recognized by the Board or a recognized stock exchange; (i) "Fraud" shall have the same meaning as assigned to it in the Securities and Exchange Board of India [Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market] Regulations, 2003; (j) "Regulatory Authority" means a person or persons who have been authorized by the Board to exercise the powers conferred under Chapter-V; (k) "Issue" shall have the same meaning as assigned to it in the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992; (l) "Market Abuse" means trading with the intent to defraud, trading with the intent to manipulate, and other improper trading [which includes trading through 'abused accounts'], the effect of which may violate the provisions of the Securities and Exchange Board of India [Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market] Regulations, 2003, or the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, or Section 12K of the Act; (m) "Abused Account" shall have the same meaning as assigned to it in the Securities and Exchange Board of India [Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market] Regulations, 2003; (n) "Proprietary Clearing Member" means a clearing member who has the right to trade in the same segment of a recognized stock exchange in which such clearing member is acting as a clearing member; (o) "Proprietary Trading" means proprietary trading by a stock broker in any segment of a recognized stock exchange for its own account; (p) "Proprietary Trading Member" means a stock broker who trades only for its own account; (q) "Large Stock Broker" means a stock broker designated as such under Regulation 19; (r) "Regulatory Sandbox" means a live testing environment where, for the purpose of introducing innovation in the securities market, eligible products, processes, services, or business models may be provided to eligible customers for a specified period; (s) "Securities Contracts (Regulation) Act" means the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (t) "Self-Clearing Member" means a clearing member who settles trades executed for its own account as well as trades executed for its clients; (u) "Board of Directors" shall have the same meaning as assigned to it in the Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015; (v) "Directed" or "specified" or "specified by" or "to be specified" or "specified" or "specified by" or "said" or "said to be" means as directed or specified by the Board or by a recognized stock exchange with the approval of the Board, unless otherwise specified; (w) "Stock Broker" means a person who has the right to trade in any recognized stock exchange, and includes a trading member; (x) "Suspicious Trading" means any trading involving fraud or any order placement involving fraud or any trading involving fraud in relation to trading; (y) "Underwriter" means a person who is engaged in the business of underwriting the issue of shares and/or securities of a body corporate; (z) "Underwriting" means the agreement made to invest (subscribe) money in the issue or offer for sale of shares and/or securities brought out by a body corporate, to invest (subscribe) money in such issue, or to make money available for such issue.

(2) Words and expressions used but not defined in these regulations, but defined in the Act, the Companies Act, 2013, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996, or the rules or regulations made thereunder, shall have the meanings respectively assigned to them in those Acts, rules, or regulations, or in any official notification issued thereunder.

Application of provisions to Clearing Members and clarifications 3. (1) A stock broker registered with the Board shall not be required to separately register as a clearing member in any segment of a clearing corporation, but for this purpose, it shall obtain the permission of such clearing corporation. (2) A clearing member registered with the Board shall not be required to separately register as a stock broker in any segment of a recognized stock exchange, but for this purpose, it shall obtain the permission of such recognized stock exchange. (3) A person registered as a participant at a depository clearing corporation shall not be required to separately register as a clearing member to participate in proprietary trades in corporate bonds in the Repo-Reverse Repo segment. Explanation – For the purposes of these regulations, "participant" means any person who is an eligible entity under the Reserve Bank of India Directions on Repurchase Transactions (Repo) (Reserve Bank), 2018, subject to the provisions thereof. (4) The provisions of Chapter-II, Chapter-III, Chapter-V, Chapter-VI, and Chapter-VIII of these regulations [excluding the provisions specified in Regulation 13, Regulation 14, Regulation 15(5), and Regulation 19], with necessary modifications, shall apply to clearing members, and wherever the expression "recognized stock exchange" is used, it shall be understood to refer to the clearing corporation.

Chapter - II Registration of Stock Brokers

Application for registration 4. (1) Any person wishing to carry on the business of a stock broker shall submit an application (whether online or otherwise) to the Board for a recognized stock exchange, along with the application fee specified in Chapter-IX. (2) The recognized stock exchange shall verify whether the applicant is eligible in accordance with the relevant Acts, regulations (including these regulations), and the rules and by-laws of the recognized stock exchange. (3) After verification, the recognized stock exchange shall forward such application to the Board along with its recommendation, and such application (which is complete in all respects) shall be forwarded within thirty days from the date of receipt (along with the application fee specified by the Board). (4) A stock broker registered with the Board may operate in any recognized stock exchange or in any segment of a recognized stock exchange, but for this purpose, it shall obtain the permission of such recognized stock exchange.

Submission of documents and providing clarification 5. The Board, while considering the application for the issuance of a certificate, may ask the applicant or the recognized stock exchange to submit any relevant document, and may ask the applicant or its Designated Director to appear before the Board to submit any relevant document or provide clarification.

Consideration of application for issuance of certificate 6. (1) The Board shall consider every aspect it deems necessary while considering the application for the issuance of a certificate. (2) The Board shall specifically ensure that— (a) the applicant is eligible to become a member of the recognized stock exchange; (b) the applicant has the necessary infrastructure to conduct business properly, such as adequate premises, adequate equipment, and an adequate number of employees; and (c) the applicant has at least two years of experience in trading or dealing in shares and/or securities; (d) no adverse action has been taken against the applicant for becoming a stock broker under the rules and by-laws of the recognized stock exchange, either against the applicant personally or against any of its partners, directors, members of the Board of Directors, key managerial personnel, or employees; (e) no action has been taken against the applicant under statutory provisions related to securities in the course of the stock broker business, either against the applicant personally or against any of its partners, directors, members of the Board of Directors, key managerial personnel, or employees; (f) the applicant is a fit and proper person in accordance with the criteria specified in Annexure-II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008; (g) the applicant has not defaulted in payment of any dues to the Board, the Securities Contracts (Regulation) Act, 1956, or the rules and regulations made thereunder; (h) the applicant has obtained the certificate or any other certificate related to the National Securities Market Institution (N.S.M.I.) (which may also be asked to be obtained); (i) the applicant has adequate net worth and adequate net own funds, which shall be at least the minimum specified; and (j) the applicant has at least one Designated Director who resides in India for at least one hundred and eighty days during the financial year. (3) Existing stock brokers shall comply with the requirement specified in Regulation 6(2)(j) within six months from the date of notification of these regulations.

Issuance of certificate 7. (1) The Board shall issue the certificate to the stock broker upon being satisfied that the applicant has complied with the requirements specified in Regulation 6, subject to such conditions as the Board may deem fit. (2) The Board shall inform the recognized stock exchange of which the applicant is a member in this regard.

Procedure for appeal in case of refusal to issue certificate 8. (1) The Board may refuse to issue the certificate after providing the applicant with a reasonable opportunity of being heard, and within thirty days from the date of such refusal, the Board shall inform the applicant and the relevant recognized stock exchange in writing, along with the reasons for refusal. (2) The applicant may, within thirty days from the date of receipt of the aforementioned written communication, submit an application to the Board for reconsideration of the refusal to issue the certificate. (3) The Board shall reconsider such application and inform the applicant and the relevant recognized stock exchange in writing of its decision in this regard.

Payment of fees 9. (1) Each eligible applicant for the issuance of a certificate as a stock broker shall pay the requisite fee as specified in Chapter-IX. (2) The Board may grant a stock broker a period of six months to pay such fee, provided sufficient cause is shown by the stock broker in this regard.

Conditions of the certificate 10. The certificate shall be issued under the following conditions under Regulation 7: (a) the stock broker is a member of a recognized stock exchange; (b) the stock broker shall comply with the rules, regulations, and by-laws of such recognized stock exchange, which are necessary for the stock broker to perform its duties as a stock broker; (c) in the event of a change in control, the stock broker shall submit an application to the Board through the recognized stock exchange and obtain full approval in the manner specified; (d) the stock broker shall pay the fee to the Board in the manner specified in these regulations; (e) the stock broker shall take adequate steps to obtain the necessary licenses within twenty-one calendar days from the date of registration; (f) the stock broker shall comply with the Code of Conduct specified in Chapter-VIII; (g) the net worth of the stock broker shall always be at least the minimum specified in Chapter-X; (h) if there is a major change in the information submitted at the time of registration, the stock broker shall inform the Board through the recognized stock exchange. Explanation: For the purposes of this regulation, 'major changes' include: i. Change in control; ii. Change in Designated Director, key managerial personnel, or compliance officer; iii. Change in name; iv. Change in the address of the registered office; v. Change in the form in which the stock broker operates; vi. If the net worth falls below the minimum required; vii. If the person is no longer a 'fit and proper person' according to the criteria specified in Annexure-II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008; and viii. Any other change (as may be specified).

Surrender of certificate 11. Any stock broker wishing to cease its business shall submit an application to the Board to surrender the certificate issued under these regulations, and such application shall be made and subject to such conditions as specified by the Board.

Carrying on other business activities 12. (1) A stock broker may carry on any other business activity that falls under the regulatory purview of another financial sector regulator or any other authority [as may be specified], in the manner specified by the Board. (2) Such business activity shall fall under the purview of that financial sector regulator or authority. Explanation: For the purposes of these regulations, the expression "financial sector regulator" means an authority or body established to regulate the services provided or transactions conducted in the financial sector under any applicable statutory provisions, and includes— Reserve Bank of India, Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, International Financial Services Centres Authority, Ministry of Corporate Affairs, Securities and Exchange Board of India, or any other authority as may be specified by the Board.

Incidental advice 13. A stock broker may give incidental advice to its clients on the basis of which they may decide to buy, sell, or hold shares and/or securities, but for this purpose, it shall comply with the provisions of Chapter-III of the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013.

Carrying on underwriting business 14. (1) A stock broker shall be eligible to carry on business as an underwriter. (2) A stock broker shall carry on underwriting only with its own net worth / own money (as specified). (3) Each stock broker carrying on business as an underwriter shall bear the following responsibilities— (a) it shall not derive any direct or indirect benefit, other than the commission or brokerage [as determined according to the agreement made for underwriting]; (b) the amount for which underwriting has been undertaken under all agreements shall not exceed twenty percent of its net worth; (c) each stock broker carrying on business as an underwriter shall invest money in the shares and/or securities of any company, if called upon to subscribe to the shares and/or securities of any company under any agreement, within forty-five days from the date of receipt of information from such company; (d) it shall enter into an agreement (which is valid) with each company [for which it is acting as an underwriter], and such agreement shall also include the following— i. the duration for which such agreement shall remain valid; ii. the duties and responsibilities of the underwriter and the client; iii. the maximum amount for which underwriting has been undertaken; iv. the time limit within which the underwriter shall invest money in the issue after receiving information from the company or on its behalf; v. the commission or brokerage to be paid to the underwriter; and vi. the guarantees provided by the underwriter to fulfill the commitment of underwriting the specified amount. (4) Stock brokers carrying on business as underwriters shall comply with the provisions made in the regulations under the Act regarding such activities.

Chapter - III Liabilities and Responsibilities

Maintenance of books of accounts, records, and documents properly 15. (1) Each stock broker shall maintain the following books of accounts, records, and documents [in paper or electronic form]— (a) register of trades (deal book); (b) client ledger; (c) cash ledger; (d) stock ledger; (e) cash book (cash book); (f) bank pass book or bank book or bank statement; (g) register of shares and/or securities; and account statements and other records [which have been provided by depository participants in relation to demat shares and securities, detailing the receipt and delivery of shares]; (h) copies of contract notes issued to clients; (i) written consent of clients in respect of contracts entered into as principal; (j) margin deposit book or margin ledger or collateral ledger; and (k) forms filled by clients for opening accounts (in the format as specified).

(2) A stock broker in the "Execution Only Platform" segment shall maintain the books of accounts, records, and documents [in paper or electronic form] as may be directed. (3) Each stock broker shall inform the recognized stock exchange (of which it is a member) where it will maintain its books of accounts, records, and documents. (4) Each stock broker shall submit a copy of the audited balance sheet and profit and loss account to the recognized stock exchange (of which it is a member) within six months from the end of each accounting period, or within the longer period specified, if any. (5) Each stock broker carrying on business as an underwriter shall also maintain the following documents and records— (a) details of all agreements; (b) the total amount invested in the shares and/or securities of each company under the agreements; (c) in the case of a stock broker being a company, the details of each accounting period...