Sebi may ease GIFT broker entry, relaxes MFs' 'skin in game' rule

MUMBAI: Markets regulator Sebi on Friday proposed that stock brokers willing to open a subsidiary or a joint venture for carrying out securities market-related activities in GIFT City in Gujarat would not need a regulatory nod.

The regulator is also proposing that stock brokers could carry out their securities-related operations at GIFT City through a separate business unit (SBU) of its domestic stock broking entity on an arm's-length basis.

Both the proposals, if approved by the regulator, would act as major boosters to domestic brokers and make it easier for them to operate in the GIFT City, industry players said.

"In order to ensure ease of doing business and to leverage the existing infrastructure of the stock brokers, it is proposed that stock brokers may offer these services under (an) SBU of the stock broking entity itself on an arms-length basis," the Sebi consultation paper said.

The markets regulator, through another circular on Friday, also said that employees of fund houses who are now compulsorily paid at least 20% of their annual monetary compensation through units of schemes they manage, will now be slab-based.

Under new rules, effective April 1, according to the role and the salary structure of the employee, the units as a percentage of their remuneration could be between 10% and 22.5%. Also, employees drawing less than Rs 25 lakh as cost-to-company, would not be covered under this 'skin-in-the-game' rule.


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