Mumbai, March 27 -- The Securities and Exchange Board of India (SEBI) is working on a new penalty system that would prevent brokerage firms from being fined multiple times for the same violation. The proposal, which has been under discussion for the past year, aims to stop different stock exchanges from imposing separate penalties for a single default.

The SEBI is in talks with stock exchanges to implement this rule, which would help reduce the financial burden on brokers, NDTV Profit reported. Currently, brokerage firms can face penalties from multiple exchanges for the same regulatory violation. For example, if a broker fails to report a technical glitch on time, does not settle client funds, or fails to resolve investor complaints, a...