SEBI Proposes Single Master Circular For Exchanges, Separate Framework For Clearing Corporations

On 22 June, the Securities and Exchange Board of India (SEBI) announced a comprehensive review of its Master Circulars governing stock exchanges, clearing corporations, and commodity derivatives, aimed at simplifying compliance requirements for securities market participants.

SEBI said the exercise seeks to simplify content, remove redundancies, streamline periodic filings, and consider stakeholder suggestions.

As part of the initiative, the Board issued four consultation papers covering administration of exchanges, trading at stock exchanges, exchange-traded derivatives, and trading software and technology for exchanges. While consultations on the first three papers have been completed, the fourth remains open for public comments.

Among key proposals, it suggested consolidating existing provisions into a single Master Circular for exchanges covering stock exchanges and commodity derivatives exchanges, along with a separate Master Circular for clearing corporations. It also proposed a consolidated circular for common IT-related provisions applicable to Market Infrastructure Institutions.

The regulator further proposed reducing the size of the Exchange Master Circular by nearly 50%, discontinuing certain regulatory reports submitted to SEBI, introducing a single-window registration process for brokers offering Smart Order Routing facilities, and reviewing the system and network audit framework for Market Infrastructure Institutions.

Other proposals include discontinuing Close To Money (CTM) norms for options in goods, reviewing the client code modification framework, liberalising norms for liquidity enhancement schemes, and merging Investor Protection Funds across equity and commodity segments.

SEBI has invited public comments on the consultation paper relating to trading software and technology for exchanges until 13 July 2026.