Advertisement
When should a housing society in Mumbai start considering re...
From GST on JDAs to SEBI’s REIT reclassification and the S...
Stay ahead in the world of real estate with our daily podcas...
Stay ahead in the world of real estate with our daily podcas...
An Indian brokers association has sought a six-month pause on new RBI norms tightening bank lending to stock brokers and market intermediaries. The revised rules, effective April 1, include higher collateral requirements for bank guarantees and a ban on bank funding for proprietary trading. The Association of NSE Members of India (ANMI) has urged SEBI to intervene, stating the changes could reduce market liquidity, raise trading costs and impact foreign portfolio investor participation. The body said proprietary market makers play a key role in price efficiency and warned that funding restrictions may disadvantage domestic brokers compared to overseas firms.
An Indian brokers association has requested a six-month pause on new Reserve Bank of India (RBI) norms that tighten bank lending to stock brokers and market intermediaries, according to a document reviewed by Reuters. Advertisement
The revised rules, set to take effect from April 1, include higher collateral requirements for bank guarantees and a ban on bank funding for proprietary trading by brokers.
The Association of NSE Members of India (ANMI) has written to the Securities and Exchange Board of India (SEBI), seeking intervention and a temporary suspension of the measures.
In its letter, ANMI said the new norms could restrict access to bank financing for proprietary trading positions, reduce market liquidity and increase trading costs. The body also cautioned that the changes may discourage participation by foreign portfolio investors.
The brokers association stated that proprietary market makers and arbitrage desks play a critical role in providing liquidity and ensuring price efficiency. It warned that limiting funding access could unintentionally affect these functions.
The letter further argued that the restrictions may create an uneven playing field between domestic and overseas firms. According to ANMI, foreign participants may continue to finance trades through international banks, potentially shifting market share away from local brokers.
The association said a six-month pause would allow stakeholders to conduct impact assessments, provide feedback and engage in consultations with regulators before the rules are implemented.
Emailed queries sent to SEBI, the RBI and ANMI did not receive immediate responses.
The RBI had announced the revised norms last week as part of its efforts to strengthen oversight of bank exposures to market intermediaries. The proposed implementation timeline has now become a point of discussion within the brokerage industry.
Source: Reuters
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
