In a recent development, the National Stock Exchange (NSE) has issued a vital circular, dated September 18, directing trading members to cancel the registration of authorized persons (APs) who have shown no activity or have not executed any trades in the past six months.
Authorized persons can be individuals or firms appointed by trading members, such as stock brokers, to assist investors in gaining access to their trading platforms.
Back on June 2, 2023, the NSE had initially urged trading members to identify AP terminals that remained inactive or devoid of any trading activity during this specified period.
The latest circular underlines the urgency of promptly deactivating inactive APs, emphasizing the significance of maintaining the trading ecosystem’s integrity and safeguarding investor interests. It highlights the potential disruption and negative impact on investor confidence caused by inactive APs.
In response to these concerns, the NSE advises all trading members to regularly review the status of their registered APs, regardless of whether they have been assigned trading terminals. The circular suggests taking necessary action by canceling the registration of APs exhibiting prolonged inactivity spanning six months or more.
Trading members are required to identify these inactive APs as of the current date and ensure that the cancellation of their registration is submitted to the Exchange no later than October 31, 2023.
Furthermore, the circular discloses that Annual Maintenance Charges (AMC) will be applicable to all registered APs across segments starting from April 1, 2024. As a result, AMC fees for registered APs, based on the Exchange’s records as of March 31, 2024, will be imposed for the financial year 2024-25 by April 2024.
Notably, the AP Registration fee has been revised to Rs 5,000 per segment (plus applicable GST), and the AP Annual Maintenance Charge has been updated to Rs 5,000 for all segments (plus applicable GST), as per the circular issued on June 2.
This move by the NSE aims to streamline the functioning of the stock market and maintain investor confidence by ensuring that authorized persons remain active and responsive to investor needs. Trading members must heed this directive and take the necessary steps to comply with these regulations by the specified deadlines.