The Securities and Exchange Board of India (Sebi) today announced that limited liability partnerships (LLPs) can become members of stock exchanges.
In other words, LLPs can register as stock brokers. The market regulator made this relaxation after receiving various requests from stock exchanges. The capital market watchdog said stock exchanges had been permitted to admit LLPs as members to enable the latter to get registration as stock brokers.
LLP is a business structure coming between a partnership firm and a corporate body.
The market regulator added that the Securities Contract Regulation Rules, 1956 (SCRR) do not explicitly mention LLPs as the Limited Liability Partnership Act, 2008 was a subsequent development.
According to the LLP Act, LLP is a body corporate.
SCRR rules provide that limited liability companies (LLC) and partnership firms are eligible to be admitted as members of stock exchanges.
“In this context, it may be stated that LLPs are akin to LLCs and partnership firms,’’ Sebi said.
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