Sebi revises penalty norms for stock brokers to remove ‘stigma’
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The Securities and Exchange Board of India (Sebi) has introduced a uniform penalty structure across stock exchanges to be paid only once to one exchange for the same violation. It has also reduced the number of penalties on stock brokers from 235 to 90. In the current penalty framework, penalties for similar observations may differ across exchanges, and in some cases, brokers having membership with multiple exchanges face multiple penalties for the same observation. "The term penalty is generally associated with stigma. Using the term penalty for procedural lapses and technical errors creates unintended reputational risk for entities," Sebi said on Friday. The regulator has proposed the adoption of financial disincentives in place of penalties for procedural lapses. The revised penalty framework is aimed at removing inconsistencies in the quantum of penalties across exchanges for the same type of observation. Live Events It woul...