The Securities and Exchange Board of India (SEBI), on October 08, 2024, issued a notification regarding the Association of persons regulated by the Board and their agents with certain persons.
Amendments to three key regulations on August 26, 2024: SEBI (Intermediaries) (Amendment) Regulations, 2024, Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Fourth Amendment) Regulations, 2024, and SEBI (Depositories and Participants) (Second Amendment) Regulations, 2024. These amendments prohibit SEBI-regulated entities, including stock exchanges, clearing corporations, and depositories, as well as their agents, from associating with individuals or entities that provide securities-related advice or performance claims unless registered or permitted by SEBI. However, associations through a “specified digital platform” are exempt from these restrictions.
The amendments require regulated entities to ensure their associates or agents do not engage in such activities without SEBI's permission. A "specified digital platform" will be further defined, with mechanisms in place to prevent and address misuse. Additionally, investor education activities are exempt, provided they do not involve prohibited activities. Regulated entities must terminate any existing contracts with non-compliant individuals or entities within three months from the circular's issuance.
[Notification No. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2024/143]
