SEBI to examine brokers’ plea on RBI norms

Tuhin Kanta Pandey, chairman, SEBI | Photo Credit: DHIRAJ SINGH

The Securities and Exchange Board of India (SEBI) will examine representations made by stockbrokers on the Reserve Bank of India’s (RBI) revised bank funding and collateral norms, SEBI chairman Tuhin Kanta Pandey said on Monday.

“We have received a representation, including from ANMI. We have seen it and we will examine it,” Pandey said at a portfolio management services (PMS) industry conclave.

He said the RBI had earlier issued draft guidelines and followed a consultative process before notifying the final framework.

“There are three or four issues. It is basically a matter with the RBI. But since the representation has also come to us, we will have a look at it,” he said.

However, RBI governor Sanjay Malhotra said on Monday that RBI is not planning to revisit the announced rules for bank financing of proprietary traders and brokers. He said the central bank had already watered down the proposal as the original draft norms had proposed a complete ban on such lending.

Broker concerns

The Association of National Exchanges Members of India (ANMI) recently made representations to SEBI, raising concerns over the RBI’s tightened norms governing bank guarantees and cash collateral for capital market intermediaries. The industry body has flagged potential operational and funding challenges for brokers once the revised framework comes into effect.

SEBI also plans to undertake a comprehensive review of the SEBI (Portfolio Managers) Regulations, 2020 to align it to the evolved market. “We propose to carry out a comprehensive review of the PMS regulations so that the framework remains robust and relevant. However, regulation alone cannot build a strong industry,” Pandey said.

The regulator has already begun working on rationalisation of settlement regulations, takeover norms, and listing obligations and disclosure requirements (LODR), which could be taken to the board by June, he said.

“Risk profiling, suitability assessment, and client communication must be clear, consistent, and evidence-based. Going ahead, PMS distributor conduct will matter—the industry must guard against mis-selling,” Pandey said.

AUM surge

The PMS industry had around 215,000 clients as of January 2026, with assets under management, excluding those under EPFO and PF, of about Rs 10.5 trillion, growing at a compound annual growth rate of 17 per cent.

Meanwhile, total clients, as of January 31, 2026, stood at about 2.15 lakh, an almost 50 per cent increase from 2022. The number of registered portfolio managers also increased from 361 to 501 over the same broad period.

The chairman also referred to the importance of internal controls and accountability within the regulator. This comes amid reports that SEBI suspended its General Manager Achal Singh on Friday on the alleged issues of integrity.

The order said the official is placed under suspension in terms of SEBI Employee Service Regulations, with immediate effect. It also directed that he will not enter any office premises of SEBI without the permission of Chief General Manager of Human Resource Department of SEBI.

Published on February 23, 2026