Sebi Intensifies Scrutiny of Broker Dealing Rooms Amid Front-Running Concerns

• India's capital markets watchdog, Sebi, is stepping up oversight of stockbrokers' dealing room operations.
• The move is part of a broader crackdown on front-running, where employees misuse advance knowledge of large pending trades.
• Sebi and stock exchanges have conducted inspections at several brokerage firms, focusing on institutional and HNI dealing desks.
• Regulators are assessing if each trade can be traced to original client instructions, examining access controls and software platforms.
• Sebi is seeking full audit trails for transactions, including originating instructions via recorded lines, emails, or approved messaging systems.