The Ministry of Finance returns the Old Stock Stock Exchange rule to stimulate clarity and facilitate the compliance of the broker

In a decision aimed at aligning regulatory standards on the development of the commercial landscape of the financial markets of India, the Department of Economic Affairs (DEA) modified rule 8 of the rules of securities contracts (regulations) (SCRR), 1957. Announced on May 19 via an official press release, the amendment is designed to offer greater regulations and an ease of doing things for business.

The revision comes following a discussion document published by the DEA in September 2024, which raised concerns concerning the ambiguous language of rule 8 – in particular the indefinite scope of the term “any business”. The document noted that this lack of clarity left the rule open to variable interpretations.

According to a press release, the DEA has now formalized the changes through the notification of Gazette GSR 318 (E). Rule 8, which describes the eligibility criteria for members of recognized scholarships, previously prevented brokers from engaging in any commercial activity beyond the titles or derivatives of raw materials – unless you act as broker or agent and without undergoing personal financial responsibility.

The amendment reflects the DEA recognition of growing complexity and interconnectivity in the financial sector, as well as the evolving roles of brokers. “Given the growth of the scale and the interconnection of the financial sector and the evolution of the nature of the business of brokers over time,” said the press release: “The DEA deemed necessary to review the relevance of the guarantees integrated into the rules.”

Changes follow the stakeholder consultations and are part of the government’s broader initiative to rationalize the regulations. The update rule aims to ensure that brokers can effectively operate without undermining the regulatory framework, thus supporting the growth and continuous integrity of the capital markets of India.