Securities and Exchange Board of India relaxes enhanced supervision reporting for stock brokers by removing demat account reporting and extending exemptions to primary dealers

The Securities and Exchange Board of India (SEBI) has amended the enhanced supervision framework for stock brokers and depository participants to ease reporting obligations, including doing away with the requirement for brokers to report their demat accounts to stock exchanges. The changes also align the treatment of brokers that are primary dealers with the existing exemptions available to brokers that are banks. Under the revised provisions, all demat accounts maintained by stock brokers must be tagged, but this does not apply to stock brokers that are also primary dealers for demat accounts used exclusively for activities other than stock broking. Brokers that are also banks or primary dealers must report only those bank accounts used for stock broking activities, and details of new bank accounts and closures must be communicated to stock exchanges within seven working days. Depositories must ensure demat account nomenclature, once assigned by a stock broker, is not modified, and must provide stock exchanges with details of all demat accounts opened or closed by a stock broker, with the sharing mechanism and periodicity to be jointly determined by stock exchanges and depositories. The amendments take effect from April 17, 2026, and stock exchanges and depositories have been directed to notify members and participants, publish the changes on their websites, and amend relevant bye-laws, rules and regulations to implement the decision.