(SEBI + EXCHANGE + PMLA + compliance requirements)

1. SEBI registration norms

• Must be registered as a trading member and/or clearing member with NSE/BSE/MCX.
• Must hold a valid SEBI stock broker registration number.
• Mandatory registration under PMLA (prevention of money laundering).
• Maintain net worth requirements as per exchange rules (₹1–3 Crore minimum depending on segment).

2. KYC & on boarding norms

• Follow SEBI KYC norms through KRA (CVL, NDML, OR KARVY KRA).
• Mandatory:
• Aadhar verification
• Pan verification
• Mobile + email otp
• IPV (in-person verification) online/offline
• Bank account verification via penny drop
• Client must receive rights & obligations, policies & procedures, and tariff sheet before account activation.

3. Risk management system (RMS) norms

• Upfront margin collection is compulsory for all trades.
• No leverage beyond SEBI regulations.
• Square-off rules must be clearly defined for:
• Intraday
• Margin shortfall
• F&O positions
• No broker can offer assured returns or promised profits.

4. Brokerage norms (discount broker’s specific)

• Brokerage must be fixed and transparent, generally:
• ₹0 for equity delivery
• Flat ₹10–20 per executed order for intraday/F&O
• Must display all charges clearly:
• Brokerage
• GST
• STT
• Exchange charges
• DP charges
• No hidden charges allowed.

5. Investor fund & securities norms

• Maintain separate client funds and broker funds (no mixing allowed).
• Transfer only to the client’s registered bank account.
• Quarterly settlement of client funds is mandatory unless opted out.
• Pledge and re-pledge of securities must follow SEBI’S EDIS process.

6. Compliance & reporting norms

Regular filing with:

• SEBI
• Exchanges
• Depositories
• Monthly/quarterly compliance reports.
• Mandatory internal audits and system audits.
• Report suspicious transactions under PMLA.

7. Technology & platform norms

• Maintain secure trading infrastructure.
• Two-factor authentication (2fa) for login.
• System downtime and order failure logs must be recorded.
• Notify clients in case of:
• Planned maintenance
• Outages
• Disruptions

8. Grievance Redressal norms

• Dedicated compliance officer.
• Mandatory display of:
• Compliance email
• Grievance officer
• SEBI scores link
• All complaints must be resolved within SEBI’S timelines.
• Display monthly complaint data on website.

9. Disclosures & transparency norms

• Brokers must disclose:
• Risk disclosure document
• Investor charter
• Terms & conditions
• Policies & procedures
• Margin requirements
• Intraday auto square-off norms
• Display investor grievance data on the website.

10. Advertisement & communication norms

No misleading promises of:

• Returns
• Profits
• Risk-free trades
• Research, calls, or tips cannot be given without SEBI research analyst registration.
• All promotions must mention market risk disclosure.

11. Anti-money laundering norms

• Monitor client transactions for red flags.
• Enhanced due diligence for high-risk clients.
• Report STR (suspicious transaction report) to FIU-IND.
• Keep client data for minimum 5 years.

12. Account closure norms

• Provide easy online/offline account closure.
• Clear all dues before closure.
• Refund any remaining ledger balance to client’s bank account.

13. Investor safety norms

• Follow EDIS (E-DIS) for selling shares.
• No pooling of client securities.
• No unauthorized trading—client approval mandatory.