NSE Guidelines: The National Stock Exchange (NSE) has issued new guidelines for stock brokers. Their aim is to prevent manipulation in the market and protect the interests of customers. These rules will come into effect from 2025, which can prove beneficial for both investors and the market.

What changes are coming?

NSE has given the responsibility to brokers to keep an eye on suspicious activities. If a client's trading activities seem suspicious, the broker will have to immediately inform the exchange about it.

Which activities need to be monitored?

• Trading in someone else's name (Mule Account)
• Fake demand to increase share prices
• tampering with prices
• Insider trading
• Circular trading and pump-and-dump schemes

Special guidelines for large brokers

Brokers who have more than 50,000 clients will have to implement these rules from January 1, 2025. Under this:

Chief Surveillance Officer (CSO): Large brokers will have to appoint a CSO.

Monitoring Department: A separate monitoring department will have to be created.

Use of technology is essential

Brokers who have more than 2,000 client codes (UCC) will have to install automatic alert systems. Smaller brokers can work with manual systems. NSE will help by providing a list of vendors.

Grievance redressal and whistleblower protection

Brokers will have to submit alert reports every quarter. Apart from this, a committee will have to be formed to protect the whistleblower.

Complaints against senior officials: Audit committee will look into it.

Complaints from other employees: Will be referred to the Compliance Officer.

Relief for customers

The new rules will provide more protection to customers. Transparency in the market will increase and the possibility of fraud will decrease.

Rules will be implemented in a phased manner

Small brokers will have to adopt rules based on the number of clients. This process will be implemented in a phased manner, so that every broker has time to prepare.