DEA Proposes New Rules to Give Stock Exchange Brokers More Flexibility While Protecting Clients
The Department of Economic Affairs (DEA) has suggested new rules for stock exchange brokers. Right now, brokers are only allowed to work with securities or commodity derivatives, and they cannot do any other kind of business.
The DEA wants to change this rule. They say that a broker’s investments should not be seen as “business” unless they involve client money, client securities, or cause financial risk for the broker.
Brokers will be allowed to work in other sectors as agents, as long as they do not take on personal financial risks. This change is designed to give brokers more freedom while still protecting client funds.
Recently, courts and regulators have said the old rule is too strict. In 2003, the Madras High Court said brokers could act as agents in other sectors without taking on financial risks. Now, the DEA is trying to update the rules to reflect this.
The DEA is asking stakeholders to share their thoughts on the changes by October 10. They want to make sure the new rules protect client money while giving brokers more flexibility to do business.
These updates are meant to modernize the rules and ensure brokers can do more, while still keeping clients safe.
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