SEBI Proposes Relaxed Reporting Norms for Stock Brokers

Draft Circular; Dated: 13.02.2026

The Securities and Exchange Board of India (SEBI) has proposed additional relaxations in reporting requirements applicable to stock brokers, with a view to simplifying compliance while maintaining regulatory transparency.

1. Tagging of Demat Accounts

SEBI has proposed that:

All demat accounts maintained by stock brokers must be appropriately tagged for regulatory identification and monitoring.

1.1 Exception for Primary Dealer Activities

This requirement will not apply to:

Demat accounts used exclusively for activities other than stock broking
Where the stock broker is also functioning as a primary dealer

This carve-out recognises the multiple roles played by certain regulated entities.

2. Reporting of Bank Accounts to Stock Exchanges

Stock brokers will be required to:

Inform stock exchanges of all existing and new bank accounts
Ensure updated reporting of operational banking arrangements used in stock broking activities

This measure aims to enhance transparency and monitoring of fund flows.

3. Special Provision for Brokers that are Banks or Primary Dealers

Where a stock broker is also:

A bank, or
A primary dealer

Such entities will be required to report only those bank accounts that are specifically used for stock broking activities

Accounts used for other regulated or business activities will not fall within the reporting requirement.

4. Regulatory Objective

The proposed relaxations aim to:

Reduce compliance burden on multi-activity entities
Improve clarity in reporting requirements
Ensure accurate tagging and monitoring of relevant accounts
Maintain regulatory oversight while enabling operational flexibility

5. Key Takeaway

SEBI’s proposal seeks to streamline reporting norms by mandating tagging of demat accounts and reporting of relevant bank accounts for stock broking operations, while providing targeted exemptions for brokers operating as banks or primary dealers.