Crackdown on brokers,MFs by Sebi?

Brokers will be able to hold onto their trading licences only if they are honest and investor-friendly.

Market regulator Sebi today said brokers and other market entities would be granted a licence to do business initially for five years and a permanent registration would be given only after assessing their track record.

The move is said to have been aimed at keep the brokers,mutual funds,bankers,portfolio managers,depository participants and other market intermediaries under check for any possible wrongdoings.

“The intermediaries would be granted registration initially for a period of five years,” Sebi Chairman C B Bhave told reporters after a meeting of the Sebi board here.

“On assessment of the performance of the intermediary and its track record during the initial five years,it will be granted registration on permanent basis,” he added.

While the initial registration would be based on various eligibility matters,the renewal to a permanent licence would take into account the entire performance of the entity,including whether they have violated any regulations and the remedial actions taken by them.

The Sebi board also decided that the currency derivative segment would have self clearing members and they would be required to have net worth of Rs 5 crore.