Sebi lets stock brokers operate in GIFT-IFSC freely

The Securities and Exchange Board of India (Sebi) has proposed new rules for stock brokers wanting to operate in the International Financial Services Centre (IFSC) at GIFT City. Under the new plan, brokers will not need Sebi's approval to start their activities there. Brokers can establish a separate business unit (SBU) within their existing brokerage firms to conduct their securities market activities in GIFT-IFSC. Sebi has stated that all policies and regulations for these units will be set by the respective regulatory authority. The regulators have emphasized the need for brokers to keep the activities of the SBU distinct from their operations in the Indian securities market. There must also be a clear separation of finances. Each SBU must maintain its own accounts, and its net worth should not be mixed with that of the main brokerage firm. Investors using the services of the SBU will not have access to the usual protection mechanisms offered by Indian stock exchanges. This includes grievance redressal and investor protection funds. Additionally, brokers that currently have subsidiaries or joint ventures specifically for GIFT-IFSC operations can close these and shift to operating under the new SBU structure.