General Guidelines for dealing with Conflicts of Interest of Intermediaries, Recognised Stock Exchanges, Recognised Clearing Corporations, Depositories and their Associated Persons in Securities Market.
Summary
This circular establishes comprehensive guidelines for intermediaries, stock exchanges, clearing corporations, and depositories to manage conflicts of interest. It mandates that these entities implement policies, maintain integrity, and ensure fair treatment of clients while avoiding personal interest conflicts. The guidelines serve as an addition to existing regulations and must be adopted within six months of the circular's issuance.
Text
All intermediaries, recognised stock exchanges, recognised clearing corporations and depositories are governed by provisions for avoidance of conflict of interest. Comprehensive guidelines are put in place collectively covering such entities and their associated persons for elimination of their conflict of interest.
Such entities shall adhere to these guidelines for avoiding or dealing with or managing conflict of interest. They shall be responsible for educating their associated persons for compliance of these guidelines.
For the purpose of these guidelines 'intermediaries' and 'associated persons' have the same meaning as defined in Securities and Exchange Board of India (Certification of Associated Persons in the Securities Markets) Regulations, 2007.
Such entities and their associated persons shall lay down, with active involvement of senior management, policies and internal procedures to identify and avoid or to deal or manage actual or potential conflict of interest.
At all times maintain high standards of integrity in the conduct of their business.
Ensure fair treatment of their clients and not discriminate amongst them.
Ensure that their personal interest does not, at any time conflict with their duty to their clients and client’s interest always takes primacy in their advice, investment decisions and transactions.
Make appropriate disclosure to the clients of possible source or potential areas of conflict of interest which would impair their ability to render fair, objective and unbiased services.
Endeavor to reduce opportunities for conflict through prescriptive measures such as through information barriers to block or hinder the flow of information from one department/ unit to another.
Place appropriate restrictions on transactions in securities while handling a mandate of issuer or client in respect of such security so as to avoid any conflict.
Not deal in securities while in possession of material non published information.
Not to communicate the material non published information while dealing in securities on behalf of others.
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Source: SecMarx — General Guidelines for dealing with Conflicts of Interest of Intermediaries, Recognised Stock Exchanges, Recognised Clearing Corporations, Depositories and their Associated Persons in Securities Market.. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.