The Securities and Exchange Board of India (SEBI) on October 06, 2023, issued the notification regarding the Requirement of Base Minimum Capital Deposit for Category 2 Execution Only Platforms.
The following has been stated namely: -
• The regulatory framework for Execution Only Platforms (EOP) for facilitating transactions in direct plans of schemes of Mutual Funds through their technology or digital platforms has been issued.
• Any entity desirous of operating as an EOP can obtain registration under one of the following two categories:
1. Category 1 EOP – Required to obtain registration from AMFI and shall act as an agent of AMC(s) and can provide service to investors and other intermediaries.
2. Category 2 EOP – Required to obtain registration as a Stock Broker in terms of SEBI (Stock Brokers) Regulations, 1992 under the EOP segment of Stock Exchanges.
• The requirement of Base Minimum Capital (BMC) deposit for stock brokers trading on the stock exchange has been prescribed. BMC is the deposit given by the member of the stock exchange against which no exposure for trades is allowed.
• Members of the stock exchanges functioning only in the EOP segment (Category 2 EOP) shall maintain a sum of Rs. 10 Lakhs with the stock exchange as a BMC deposit.
• Members having registration of more than one segment on the same stock exchange, the BMC deposit requirement shall not be additive for such number of segments and shall be the highest applicable BMC deposit, across various segments.
This shall come into force on October 06, 2023.
[Notification No. SEBI/HO/MRD/POD 3/CIR/P/2023/165]
