Zerodha: SCRA Rule Change Benefits Brokers & Rainmatter
- Nithin Kamath, founder and CEO of Zerodha, commended the Indian finance ministry and the National Stock Exchange (NSE) Tuesday for clarifying Securities Contract (Regulation) rules.
- Kamath highlighted the positive impact on Rainmatter, Zerodha's initiative supporting Indian startups.He said Zerodha can now allocate more capital to support domestic startups directly from its brokerage entity.
- The finance ministry amended the Securities Contract (amendment) Rules in May to provide regulatory clarity and enhance ease of doing business for stock brokers.
Zerodha’s Nithin Kamath applauds the latest Securities Contract (Regulation) rule clarification, a move that considerably benefits stock brokers and, crucially, Rainmatter, Zerodha’s startup incubator. The finance ministry’s amendment means brokers can now invest their own funds without burdensome exchange approvals or restrictions. This change allows Zerodha to directly allocate more capital through its brokerage entity to support Indian startups, as Kamath highlighted. This is a major win for ease of business, potentially sparking innovation. Learn how this decisive move is reshaping broker operations, streamlining processes, and boosting the Indian startup ecosystem. News Directory 3 has the details. Discover what’s next for Zerodha and the startup world.
Zerodha’s Nithin kamath Praises SCRA Rule Clarification for Broker Investments
Updated June 10, 2025
Nithin Kamath, founder and CEO of Zerodha, commended the Indian finance ministry and the National Stock Exchange (NSE) Tuesday for clarifying Securities Contract (Regulation) rules. The change allows stock brokers to invest their own funds without needing exchange approvals or facing restrictions.
Kamath highlighted the positive impact on Rainmatter, Zerodha’s initiative supporting Indian startups.He said Zerodha can now allocate more capital to support domestic startups directly from its brokerage entity. this move is expected to boost the Indian startup ecosystem by providing easier access to capital.
The finance ministry amended the Securities Contract (amendment) Rules in May to provide regulatory clarity and enhance ease of doing business for stock brokers. The amendment clarifies that brokers’ investments are generally not considered part of their “broking business,” subject to specific conditions.
“after clarification of SCRA rules by @FinMinIndia and NSE, brokers can now invest their own funds without exchange approvals or restrictions.This is huge for @Rainmatterin. We can now allocate more capital to support Indian startups directly from the brokerage entity,” kamath said on X.
According to the clarification, investments made by a member are not construed as business unless they involve client funds, client securities, or arrangements creating a financial liability on the broker.This amendment, inserting a provision in rule 8 of the Securities Contracts (Regulation) Rules, 1957, aims to streamline operations for brokers.
What’s next
With the clarified rules, Zerodha’s Rainmatter initiative is poised to increase its investments in Indian startups, perhaps fostering innovation and growth within the domestic startup landscape. The change may encourage other brokerage firms to follow suit,further stimulating the startup ecosystem.