MUMBAI, April 9 -- The Securities and Exchange Board of India (Sebi) has been asking brokers to step up checks on authorized persons (APs) and reinforce compliance every few months, according to three people familiar with the matter.

"Sebi has been informally advising brokers to carry out annual checks and surveillance on authorized persons. They call every 2-3 months to reinforce this," said one of the three people cited above. "It does not want APs to engage in unauthorized activities such as promising assured returns and collecting funds from retail investors with the intent of fraud."

India's vast network of over 100,000 authorized persons (APs)-agents who bring clients to brokers and facilitate trades-has been drawing increasing sc...