Impact of Recent Regulatory Changes on Broking

The broking industry in India has seen major transformation in recent years—thanks largely to SEBI’s regulatory changes aimed at improving transparency, investor protection, and market integrity. While these reforms serve the long-term interests of retail investors, they also reshape how brokers operate and that affects you too.

Here’s a closer look at what’s changing and what it means for you as an investor.

Key Regulatory Changes That Matter

1. “True‑to‑Label” Fee Structure

From October 1, 2024, SEBI requires that all transaction charges across brokers must be uniform and fully passed to exchanges, eliminating volume-linked discounts that brokers previously retained as profit.
What it means: Discount brokers that built models around zero brokerage now have cost pressures—some have introduced fixed trade fees (₹5–10/trade) to offset the change.

2. Tighter Derivatives/F&O Norms

SEBI increased contract sizes for index options, restricted weekly expiries, removed calendar spread benefits, and mandated higher margins—especially on expiry days. These changes significantly reduced speculative trading volume (up to 40 %) in F&O segments.
What it means: Lower volumes impact brokers’ earnings, and trading costs have risen for retail participants.

3. Direct Securities Settlement & T+0 Option

Now, when you trade, securities can be delivered directly into your Demat account from the clearing corporation—avoiding intermediary pooling . Additionally, SEBI rolled out voluntary T+0 settlement across select stocks, with instant settlement planned later.
What it means: Faster and safer settlements, better control for investors, and fewer operational risks.

4. Blocked Amount Framework

As of January 2024, SEBI introduced a system where funds to trade are blocked, not debited, until the trade executes—much like IPO applications. This is being rolled out to major brokers by February 2025
What it means: Reduced misuse of client funds and clearer fund availability during trading.

5. Expanded BSDA Limits & Zero AMC Threshold

SEBI raised account maintenance charge waivers for Basic Demat Accounts (BSDA)—from ₹2 lakh to ₹10 lakh for holding limits, and zero AMC up to ₹4 lakh holdings.
What it means: Many retail investors now pay less or no annual fees, but that reduces recurring income for brokers.

6. Compliance & Governance Overhauls

New rules hold brokerage firms accountable for detecting market abuse, implementing surveillance measures, whistle‑blower policies, and stronger internal controls. Non-compliance can result in bans or fines.
What it means: Safer markets—but higher costs for brokers to monitor and manage compliance.

🎯 Why These Changes Matter for Investors

• Some brokers may raise fees or restructure services to stay financially viable.
• Margin trading in derivatives is costlier and less accessible for small investors.
• Settlement becomes more transparent and timely.
• Regulatory oversight now ensures better protection against fraud and misuse.

For investors, the takeaway is clear: regulations are reshaping costs, service models, and broker reliability. But the underlying goal is improved safety, transparency, and fairness.

🤝 JM Financial Services: Navigating Regulatory Shifts with You

As broking models evolve, it's essential to have someone who understands both market strategy and regulatory frameworks. That’s where JM Financial Services comes in—they combine research-backed advisory with clarity on changing norms, helping you maintain confidence and continuity in your investing goals.

✅ FAQs: Regulatory Impact on Broking

Q1. Will I need to pay brokerage for delivery trades now?
Yes. Many discount platforms have introduced flat trade fees (₹5–10 per trade) post-SEBI regulations removing zero brokerage models

Q2. Does higher F&O contract size mean retail traders can no longer trade options?
Smaller retail traders may find it less viable due to higher capital requirements and reduced contract frequency—but they can still trade with proper margin capacity.

Q3. How will direct settlement benefit me?
Your shares get credited directly to your Demat account, increasing transparency, faster settlements, and reduced operational risks.

Q4. Are compliance reforms likely to affect how I invest?
Markets become safer and more transparent, but brokers may streamline product offerings or tighten onboarding to meet regulations—making it important to reassess broker selection

Q5. Who can I talk to if I’m unsure about trading post these changes?
JM Financial Services has specialists who explain regulatory impacts and help you strategize effectively—turning complexity into clarity.