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The regulator said stock brokers proposing to undertake securities market activities in GIFT-IFSC may do so under a separate business unit (SBU) of the stock broking entity itself.
“The matters related to policy, eligibility criteria, risk management, investor grievances, inspection, enforcement, claims, etc, for SBU in GIFT-IFSC would be specified under the regulatory framework issued by the respective regulatory authority and all activities of the SBU in GIFT-IFSC would be under the jurisdiction of that regulatory authority,” Sebi said in a discussion paper on Friday.
It said stock brokers should ensure that securities market-related activities of the SBU in GIFT-IFSC are segregated and ring-fenced from the Indian securities market-related activities of the stock broker and arms-length relationship between these activities are maintained.
“Such SBU in GIFT-IFSC shall be exclusively engaged in providing securities market-related activities in GIFT-IFSC only,” the regulator said.
Further, brokers would have to maintain a separate account for the SBU on an arms-length basis. And the net worth of the SBU should be kept segregated from the net worth of the stock broker in the Indian securities market.As the activities of the SBU would be under the jurisdiction of another regulatory authority, grievance redressal mechanism and investor protection fund of the stock exchanges and SCORES will not be available for investors availing the services of the SBU.Sebi said brokers who have already floated subsidiary or entered into joint venture to undertake securities market- related activities in GIFT-IFSC after obtaining its approval, may dismantle such subsidiary and joint venture and carry out such services under an SBU of the stock broking entity itself.
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https://economictimes.indiatimes.com/markets/stocks/news/sebi-may-allow-stock-brokers-to-operate-in-gift-ifsc-sans-approval/articleshow/119325615.cms
