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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Market Participants in the Securities Market

A sub-broker arrangement was historically used by trading members. Under the current SEBI framework, how are intermediaries who earlier operated as sub-brokers now treated?

Former sub-brokers must now operate as authorised persons approved by the stock exchange, or become trading members directly. SEBI discontinued separate sub-broker registration, so they cannot continue indefinitely under that category.

  1. AThey must register as authorised persons with the stock exchange, or become trading membersCorrect
  2. BThey continue to be registered with SEBI as sub-brokers indefinitely
  3. CThey became clearing corporations
  4. DThey must act only as depository participants

Explanation

SEBI discontinued the separate sub-broker registration category. Earlier sub-brokers had to move to become authorised persons approved by the exchange, or take up direct trading membership. Remaining as a SEBI-registered sub-broker is no longer an option, and the other roles are unrelated.

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