Archive · 10 Jun 2025
India Updates Brokerage Rules to Boost Startup Investment
The government changed a rule so that brokers can invest more easily in startups.
Before, brokers needed permission from stock exchanges to use their own money for investments.
Now, as long as they don't use client money or securities, they don't need to ask for permission.
Nithin Kamath, the CEO of Zerodha, said this is great news for his company's investment arm, Rainmatter, which invests in financial technology startups.
The change was made after the Finance Ministry and the National Stock Exchange clarified the rules, making it easier for brokers to support Indian startups directly using their brokerage entity's own funds.
Brokers can now invest their own funds in startups without requiring approvals.
This change comes after clarification from the Finance Ministry and NSE.
The updated rules refer to the Securities Contracts (Regulation) Rules (SCRR), 1957.
The revised rule affects how brokers' investments are viewed.
Nithin Kamath of Zerodha praised the rule change as 'huge'.
- Who
- Brokers and Indian startups.
- What
- A rule change allowing brokers to invest their own funds in startups without needing exchange approvals.
- When
- Following a gazette notification dated May 19, 2025.
- Where
- India.
- Why
- To allow brokers to invest in startups more easily.
- Key Change
- Brokers can invest own funds without exchange approvals if client funds or securities aren't involved.
- Affected Rule
- Securities Contracts (Regulation) Rules (SCRR), 1957
- Government Body
- Finance Ministry
- Stock Exchange
- National Stock Exchange (NSE)
- Industry Impact
- Facilitates investment in Indian startups
- Company Reaction
- Zerodha CEO Nithin Kamath called it 'huge' for Rainmatter