Stock brokers are not permitted to distribute third-party lending products such as home loans, personal loans, vehicle loans or education loans, even if they are registered as research analysts, the National Stock Exchange (NSE) clarified on Monday.
“It has been observed that the trading members, who are also registered as research analysts, are carrying out distribution of banking products related to various types of loans,” the NSE noted.
What do Sebi’s July 2025 FAQs allow research analysts to do?
The exchange cited recent Securities and Exchange Board of India (Sebi) FAQs released in July 2025, which allow research analysts to distribute non-Sebi-regulated products, such as banking products, only at a family or group level. However, the NSE emphasised that this relaxation does not extend to stock brokers, even if they hold dual registration as research analysts.
How does the June 2025 NSE circular restrict brokers?
The clarification comes with reference to an earlier NSE circular issued in June 2025, which restricts brokers to only those lending products explicitly permitted by Sebi, such as margin trading facility (MTF) and T+1+5 funding.
What are the consequences of non-compliance?
According to the NSE, stock brokers must strictly comply with the exchange’s framework governing the distribution of third-party products. Any engagement in unauthorised lending activities would be considered a violation of exchange guidelines.