Sebi proposes standard format on trading preference for different exchanges

New Delhi, Jun 21, 2023

Synopsis
Existing clients must be offered access to all active exchanges for the segments they have already opted for. Clients will have the option to opt-out of such access. The rules will come into effect from 1 August 2023, while exchanges must monitor this circular's implementation through a half-yearly internal audit and inspection of the stock brokers.

Capital markets regulator Sebi on Wednesday prescribed a standard format for seeking the trading preference of clients for the same product in different exchanges. Currently, clients need to give separate authorisation/letters in case they want to trade on different stock exchanges for a particular segment.

Based on the representations received and in consultation with stock exchanges, it has been decided to standardise the format of "Trading Preferences" to ensure that clients are permitted to access all the stock exchanges in which the stock brokers are registered for the same segment, the regulator said.

Under the new mechanism, all stock brokers are mandated to register their new clients on all the active stock exchanges after obtaining the trading preferences as per format.

For existing clients, the brokers are mandated to offer them access to all the active stock exchanges for the segments already opted by them, as a default mode, within three months and inform their clients through email/ SMS.

The stock brokers will also provide a choice to their clients to opt out of such access by providing negative consent in this regard, and thereafter, the brokers will activate/ deactivate the segments based on the preference of their clients.

Clients will be given a choice to opt out of such access by providing negative consent, and the stock brokers shall activate/deactivate the segments based on the preference of clients.

The provisions of this circular will come into force from August 01, 2023, Sebi said.

Further, the regulator also directed the exchanges to monitor the implementation and compliance of this circular through half-yearly internal audit and inspection of the stock brokers and communicate the same to the regulator through their monthly development report.

[The Economic Times]