Authority: Securities and Exchange Board of India (SEBI)

Order Date: Not explicitly stated in the application

Case Overview

Relitrade Stock Broking Private Limited (SEBI Registration No: INZ000184331; DP ID: IN-DP-405-2019), a company incorporated under the Companies Act, 1956, has submitted an application for Informal Guidance under Regulation 49 and 50 of the SEBI (Stock Brokers) Regulations, 2026. The applicant is a SEBI-registered Stock Broker and Depository Participant with active memberships on the NSE, BSE, and MCX, incorporated on December 3, 2012, with an authorized share capital of ₹6,00,00,000 (Rupees Six Crore).

The company's Memorandum of Association expressly authorizes it to provide financial assistance, lending, factoring services, and financing of industrial enterprises. Leveraging these constitutional powers, Relitrade intends to commence activities as a Non-Banking Financial Company (NBFC) under the regulatory purview of the Reserve Bank of India (RBI), while maintaining both its existing stock broking business and proposed NBFC operations within the same corporate entity.

The application is necessitated by Regulation 12 of the SEBI (Stock Brokers) Regulations, 2026, which permits a stock broker to carry out activities under another financial sector regulator (such as RBI) in a "manner specified by the Board." However, the specific procedural "manner" remains undefined, and formal inquiries with the National Stock Exchange (NSE) have not provided operational clarity.

The applicant seeks interpretive guidance on four specific matters:

1. Whether a singular corporate entity can simultaneously hold SEBI Stock Broker registration and RBI NBFC registration under the 2026 regulatory framework

2. The prescribed internal controls and accounting standards required to ensure absolute segregation of client funds and securities to prevent cross-collateralization between the Broking and NBFC divisions

3. The methodology for computing Networth under Regulation 47, specifically whether the company must satisfy the higher of the SEBI or RBI capital requirements on an aggregate basis

4. Confirmation of whether the addition of NBFC activities constitutes a "material change" under Regulation 10(h), requiring formal notification through the Exchanges

The application is accompanied by a non-refundable fee of fifty thousand rupees plus nine thousand rupees GST, as prescribed under Regulation 9 and Regulation 41(3) of the 2026 Regulations, with transaction reference CAXCUDO1HX2GV0 (Reference No: 950279222).

Final Outcome

This is an application for informal guidance, not a concluded order. The final outcome from SEBI is pending and will determine whether Relitrade can proceed with its plan to operate both stock broking and NBFC businesses within the same corporate entity under the respective regulatory frameworks of SEBI and RBI.

Topics: Regulatory Compliance, Financial Services Expansion