The Securities and Exchange Board of India on 13 July notified the omission of regulation 18C of the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992. Regulation 18C provides that a stockbroker engaged in buying, selling or dealing in securities other than commodity derivatives may not carry out such activities in respect of commodity derivatives. Similarly, a stockbroker carrying out such activities in respect of commodity derivatives may not do so in respect of securities other than commodity derivatives unless permitted by SEBI. The omission of regulation 18C effectively integrates trading in commodity derivatives and other securities and will come into effect upon notification of corresponding amendments in the Securities Contracts (Regulation) Rules, 1957, by the Department of Economic Affairs of the Ministry of Finance.
By Karthik Somasundram and Sneha Jaisingh, Bharucha & Partners
By Anshuman Mozumdar and Anirudh Gotety, L&L Partners