SEBI Revamps Stock Broker Rules: Allows Diverse Activities, Strengthens Investor Protection

• SEBI permits stock brokers to undertake additional activities regulated by other financial sector authorities (RBI, IRDAI, PFRDA, IFSCA, MCA, IBBI), ensuring regulatory clarity.
• New framework clarifies terms like "proprietary trading," "professional clearing member," and "suspicious activity" for better understanding.
• Brokers can offer incidental investment advice to clients, but must adhere to SEBI (Investment Advisers) Regulations, 2013, distinguishing it from full advisory services.
• Underwriting rules tightened: brokers can use only own net worth (capped at 20x), no extra benefits beyond commission, and require detailed written agreements.
• The regulations aim to provide operational flexibility for brokers, enhance investor protection, and ensure disciplined risk management, replacing 1992 rules.

Why It Matters: SEBI's new regulations offer brokers flexibility for diverse activities while strengthening investor protection.