Latest News | Sebi Asks Brokers Functioning in 'execution Only Platform' to Maintain Minimum Capital Deposit

New Delhi, Oct 6 (PTI) Capital markets regulator Sebi on Friday asked stock brokers functioning only in the Execution Only Platforms (EOP) segment to maintain a sum of Rs 10 lakh with the bourse as a base minimum capital deposit.

The EOP is a digital or online platform which allows transactions in direct plans of mutual funds without the help of distributors.

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Under the rule, an entity desirous of providing execution-only services in direct plans of mutual funds can obtain registration under either of the two categories -- category 1 EOP as an agent of asset management companies registered with industry body Association of Mutual Funds in India (AMFI) or category 2 EOP as an agent of investor, registered as a stock broker.

"It has been decided that the members of stock exchanges functioning only in EOP segment (Category 2 EOP) shall maintain a sum of Rs 10 lakh with the stock exchange as BMC (base minimum capital) deposit," the regulator said in a circular.

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However, for members having registration of more than one segment on the same stock exchange, the BMC deposit requirement will not be additive for such a number of segments and will be the highest applicable BMC deposit, across various segments, it added.

The new requirements will come into force with immediate effect, the Securities and Exchange Board of India (Sebi) said.

In June, the capital market watchdog introduced a regulatory framework for 'Execution Only Platforms' for direct plans of mutual fund schemes in a bid to protect the investors dealing in such schemes.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)