Sebi Specifies Common Client Registration Documents

Mumbai, Aug 26 | Updated: Aug 27 2004, 05:30am hrs
The market regulator Securities and Exchange Borad of India (Sebi) in consultation with stock exchanges the BSE and the NSE has formulated a uniform set of documents to be submitted for client registration.

This has been done with an objective to bring about uniformity in documentary requirements across different segments and to avoid duplication and multiplicity of documents, Sebi circular announced on Thursday.

These documents are for client registration form that is to be uniform across all the segments and exchanges, where the broker is trading on different segments and exchanges. As regards the client registration form, Sebi has reiterated that it is the responsibility of the stock broker to satisfactorily identify his clients. For the purpose, the stock broker may also seek additional information, if any, so as to satisfy himself about the antecedents of the client. Sebi has also said that it would be brokers responsibility to provide clients details as and when required.

Sebi has also specified the need for a member clients agreement that is also to be uniform across all the segments of an exchange. However, a separate agreement in the same format would be required for each of the exchanges, where the broker is trading on different exchanges.

There must also be a model tripartite agreement between the broker, the sub-broker and clients, a uniform risk disclosure documents and a broker-sub broker agreement, Sebi said.

The requirement of obtaining client registration form may be waived for Sebi registered foreign institutional investors (FIIs), MFs, VCFs as per a circular issued by Sebi. It may also be waived for scheduled commercial banks, multilateral and bilateral development financial institutions, state industrial development corporations, insurance companies registered with the Irda and public financial institution as defined under section 4A of the Companies Act, 1956, Sebi specified.