Sebi proposes standard format on trading preferences for different exchanges

New Delhi: 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.

Standardisation of trading preferences

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 stockbrokers are registered for the same segment, the regulator said.

Brokers are mandated to offer them access to all the active stock exchanges

Under the new mechanism, all stockbrokers 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.

Stockbrokers will provide choice to their clients to opt out of such access by providing negative consent

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

Provisions of circular

The provisions of this circular will come into force from August 1, Sebi said.
Further, the regulator also directed the exchanges to monitor the implementation and compliance of this circular through a half-yearly internal audit and inspection of the stockbrokers and communicate the same to the regulator through their monthly development report.

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