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Friday, June 20, 2008

SEBI (Intermediaries) Regulations, 2008 from 26th May 2008 & repealed SEBI (Criteria for Fit and Proper Persons) Regulations, 2004 and SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002

SEBI has undertaken redrafting project to consolidate the common requirements which apply to all intermediaries in so far as the common requirements are concerned. Given the fact that many requirements and obligations of most intermediaries are common, SEBI has notified SEBI (Intermediaries) Regulations, 2008 on May 26, 2008. The salient features of the Regulations are as under : -

(a) The Regulations put in place a comprehensive regulation which will apply to all intermediaries. The common requirements such as grant of registration, general obligations, common code of conduct, common procedure for action in case of default and miscellaneous provisions have been provided in the approved Intermediaries Regulations.

(b) The registration process has been simplified. An applicant may file application in the prescribed format alongwith additional information as required under the relevant regulations along with the requisite fees. The existing intermediaries may, within the prescribed time, file the disclosure in the specified Form. The disclosures shall be made public by uploading the information on the website specified by SEBI. The information of commercial confidence and private information furnished to SEBI shall be treated confidential.  In the event intermediary wishes to operate in a capacity as an intermediary in a new category, such person may only file the additional shortened forms disclosing the specific requirements of the new category as per the relevant regulations.

(c)  The Fit and Proper criteria have been modified to make it principle based. The common code of conduct has been specified at one place.

(d).The registration granted to intermediaries has been made permanent subject to the compliance of the SEBI Act, regulations, updation of relevant disclosures and payment of fees.

(e).Procedure for action in case of default and manner of suspension or cancellation of certificate has been simplified to shorten the time usually faced by the parties without compromising with the right of reasonable opportunity to be heard. Surrender of certificate has been enabled without going through lengthy procedures.

(f). While common requirements will be governed by the new Regulations, the intermediaries specific requirements will continue to be as per the relevant regulations applicable to individual intermediaries. The relevant regulations will be amended to provide for the specific requirements. The SEBI (Intermediaries) Regulations, 2008 shall come into force in relation to different classes of intermediaries on the date notified by SEBI.

(g).SEBI (Criteria for Fit and Proper Persons) Regulations, 2004 and SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 have been repealed with effect from May 26, 2008.  The Fit and Proper Person criteria and the procedure as specified in the new Regulations for action in case of default shall apply with effect from               May 26, 2008.
The full text of the SEBI (Intermediaries) Regulations, 2008 is available on the SEBI website:

Source: PR No.125/2008 dated 19th June 2008

Thanks & Regards

Investment Banking
Karvy Investor Services Limited
Moble: 919884731993/ 919790906827


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