The stock exchanges on March 3 issued a list of 15 stock brokers being designated as Qualified Stock Brokers (QSB) which will be subject to enhanced obligations and responsibilities.
- The list includes Zerodha, Angel One, 5paisa Capital, HDFC Securities, ICICI Securities, IIFL Securities, Jainam Broking, Kotak Securities, Motilal Oswal Financial Services, NextBillion Technology, Nuvama Wealth and Investment, Sharekhan, Anand Rathi Share and Stock Brokers, RKSV Securities, and Globe Capital Market.
- This list was announced following a February 2023 direction by Securities and Exchange Board of India (Sebi).
What are Qualified Stock Brokers (QSB)?
- SEBI defines QSBs as entities who, because of their size and scale of operations, can likely impact investors and the securities market, as well as governance and service standards. These stock brokers cater to the needs of a large number of investors.
- The failure of such stock brokers has the potential to cause disruption in the services they provide to large numbers of investors, causing widespread impact in the securities market.
- A stock broker will be designated as QSB on the basis of four parameters — number of active clients, total available assets of clients, trading volumes. and end-of-day margin obligations.
- All stock brokers with a total score greater than or equal to 5 on these 4 parameters are identified as QSBs.
- The scores are to be calculated on an annual basis (financial year) and the revised list of QSBs will be released jointly by stock exchanges, in consultation with SEBI.
- A stock broker designated as a QSB is required to meet enhanced obligations and discharge responsibilities to ensure appropriate governance structure, appropriate risk management policy and processes etc.
