Relaxation in timelines for compliance with regulatory requirements by trading member/ clearing members
In the wake of pandemonium caused by
spread of the COVID-19 virus, temporary relaxations in compliance requirements
and other facilitation measures are very much needed.
The following measures have been
undertaken by SEBI.
Also, in the wake of current scenario
of lockdown in country, SEBI has issued directions for Recognised Stock
Exchanges and Clearing Corporations (including those in International Financial
Services Centres) for Relaxation in timelines for compliance with regulatory
requirements by trading members / clearing members and for processing various
investor requests pertaining to Compliance and disclosures to be made under
SEBI Regulations and various SEBI circulars.
1. In view of the situation arising due to COVID-19 pandemic
and extended lockdown
period, based on representations received from Stock Exchanges, it has
been decided to extend the due date for the following regulatory filings and
compliance requirements by their trading members / clearing members:
|
S.
No.
|
Compliance
|
Due Date
|
Extended date
|
SEBI Circular Reference
|
|
I.
|
Client Funding Reporting.
|
08-Apr-20
|
31-May-20
|
SEBI letter dated July 16, 2004.
|
|
II.
|
Reporting for Artificial Intelligence (AI) and Machine Learning (ML)
applications.
|
15-Apr-20
|
31-May-20
|
SEBI/HO/MIRSD/DOS2/CIR/P/2019/10
dated
January 4, 2019.
|
|
III.
|
Compliance certificate for Margin Trading for CM
Segment.
|
30-Apr-20
|
30-Jun-20
|
CIR/MRD/DP/54/2017 dated June 13, 2017.
|
|
IV.
|
Risk based
supervision.
|
31-May-
20
|
30-Jun-20
|
-
|
|
V.
|
Internal Audit Report for half year ending
(HYE) March 31,
2020.
|
31-May-
20
|
30-Jun-20
|
MIRSD/ DPSIII/ Cir-26/ 08 dated August
22, 2008,
MRD/DMS/Cir-29/2008 dated October 21,2008, SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/
95 dated September 26, 2016 and SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/
138 dated December 20, 2016 on Enhanced Supervision of Stock Brokers (the due
date for the
submission of
internal
Audit report was made within two months from the end of half year)
|
|
VI.
|
System Audit Report (Algo).
|
30-Jun-20
|
31-Jul-20
|
CIR/MRD/DP/ 16 /2013 dated
May 21,
2013.
|
|
VII.
|
System
Audit Report.
|
30-Jun-20
|
31-Jul-20
|
CIR/MRD/DMS/ 34 /2013 dated November 6, 2013.
|
|
VIII.
|
Net worth certificate in Margin Trading for CM Segment for
HYE March 31, 2020.
|
30-Apr-20
|
30-Jun-20
|
SEBI/MRD/SE/SU/Cir-15/04 dated
March 19, 2004.
|
|
IX.
|
Net worth certificate for all members for
HYE March 2020.
|
31-May-
20
|
30-June-20
|
SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/
95 dated September 26, 2016 (the due date
for the submission of networth certificate
was made within
60 days
from the end of half year).
|
|
X.
|
Penalty for non- collection / short
collection of upfront
margins in cash segment.
|
-
|
17-May-
2020
|
CIR/HO/MIRSD/DOP/CIR/P/2019/139
dated November 19, 2019.
|
|
XI.
|
Maintaining call
recordings of orders/instructions
received
from clients.
|
-
|
17-May-
2020
|
SEBI/HO/MIRSD/DOP1/CIR/P/2018/54
dated
March 22, 2018.
|
2. The relaxation in compliance requirements at S. Nos. I - IX will be
effective from their due date till the extended date as mentioned in the above table. Provision
regarding imposition of penalty
at S. No. X above was effective from April 01, 2020. The relaxation in this regard shall be till May 17, 2020.
However, in terms of the said circular reporting of non- collection/short collection of margins in the cash segment shall continue. The relaxation in compliance requirement at S. No. XI will be effective from March 23, 2020 till May 17, 2020
with respect to trading members working from designated alternate locations.
However, the trading member and the Stock Exchange shall send a confirmation on
the registered mobile number of the client immediately after execution of the order.
3.
For trading members / clearing
members in International Financial Services Centres, relaxations in compliance
requirements at S. Nos. II, V, VI, VII and IX in the above table, will be effective from their due date till the extended
date as mentioned in the above table.
4. Stock Exchanges and Clearing Corporations are directed to bring the
provisions of this circular to the notice of their members and also disseminate
the same on their websites.
5.
This circular is issued
in exercise of powers conferred
under Section 11(1)
of the Securities and Exchange Board of India Act, 1992, to protect
the interests of investors in securities and to promote the development of, and
to regulate the securities markets.
DISCLAIMER: THE ARTICLE IS BASED ON THE RELEVANT
PROVISIONS AND AS PER THE INFORMATION EXISTING AT THE TIME OF THE PREPARATION.
IN NO EVENT I SHALL BE LIABLE FOR ANY DIRECT AND INDIRECT RESULT FROM THIS
ARTICLE. THIS IS ONLY A KNOWLEDGE SHARING INITIATIVE.
THE AUTHOR – CS DEEPAK SETH (ASSOCIATE
PARTNER HELPINGHANDS PROFESSIONALS LLP) AND CAN BE REACHED AT
CONTACTHHPRO@GMAIL.COM OR 9910248911.
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