SEBI Streamlines Broker Penalties and Exchange Rules to Boost Market Efficiency

India's securities regulator has implemented sweeping reforms to standardize penalties and simplify compliance for stockbrokers. The Securities and Exchange Board of India (SEBI) will replace punitive measures with financial disincentives for minor violations, addressing industry concerns about fairness and stigma.

A unified penalty structure across exchanges eliminates previous discrepancies, with only the lead exchange authorized to levy fines. SEBI's review of 225 penalty items resulted in the elimination of 40 redundant violations and the reclassification of 105 others as financial disincentives.

The phased implementation includes a technology-driven common reporting system, reflecting SEBI's commitment to modernizing India's financial infrastructure. These changes follow extensive consultations with market participants and aim to reduce compliance burdens while maintaining market integrity.