SEBI Notifies Stock Brokers Regulations 2026, Allows Brokers to Take up Other Activities With Compliance Riders [Read Notification]

The Securities and Exchange Board of India (SEBI) issued notification dated January 7, 2026, announcing SEBI (Stock Brokers) Regulations, 2026.

Main Change: Brokers Can Do Other Activities

A key change under the new regulations is that stock brokers are now allowed to do other businessactivities, apart from regular stock market work.

As per the regulations:

Stock brokers can take up activities that are regulated by other financial regulators. These activities must be carried out in the way SEBI allows or specifies. The activity will still be regulated by the concerned authority, such as:

• Reserve Bank of India (RBI),
• Insurance Regulatory and Development Authority of India (IRDAI),
• Pension Fund Regulatory and DevelopmentAuthority (PFRDA),
• International Financial Services Centres Authority (IFSCA),
• or any other authority notified by SEBI.

This step is meant to give brokers more flexibility to expand their business.

Conditions Attached to This Flexibility

SEBI has made it clear that this flexibility comes with strict conditions. Stock brokers must:

• Have strong internal systems to manage risks.
• Properly handle any conflict of interest between different business activities.
• Ensure that investor interests are not harmed because of additional activities.

Protection of Client Money and Securities

The regulations strongly focus on investor safety. Brokers are required to:

• Keep client money and securities separate from their own funds.
• Use client funds and securities only for permitted purposes.
• Resolve investor complaints within the specified time limits.
• Follow SEBI’s Investor Charter and grievance redressal system.

Compliance Officer is Mandatory

To improve compliance:

• Every stock broker must appoint a Compliance Officer.
• The Compliance Officer will ensure that:
• SEBI rules and laws are followed,
• SEBI circulars and guidelines are complied with,
• stock exchange rules are followed.
• Any serious non-compliance must be reported to the stock exchange.

Cyber Security and Monitoring Requirements

• The regulations also require brokers to:
• Put in place proper cyber security systems.
• Maintain records, books of accounts, and documents as prescribed.
• Monitor trading activity to detect fraud, misuse, or suspicious behaviour.
• Follow audit and reporting requirements.

Concept of “Qualified Stock Brokers”

SEBI has introduced a new category called “Qualified Stock Brokers”. These are large or important brokers identified based on:

• number of clients,
• trading volume,
• value of client assets,
• proprietary trading activity.

Such brokers will have to follow extra governance and risk management rules.

Other Important Changes

The regulations also combine rules for stock brokers, clearing members, and self-clearing members into one framework. It updates rules on registration, net worth, deposits, and fees. It strengthen SEBI’s powers to inspect, investigate, and take action against brokers.

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