Most Important Terms and Conditions (MITC)
Summary
SEBI mandates the introduction of a standard Most Important Terms and Conditions (MITC) document to highlight critical aspects of the broker-client relationship. The Brokers’ Industry Standards Forum is tasked with publishing implementation standards by January 1, 2024, subject to SEBI's discretion if they fail to do so. Market participants must comply with these requirements for new clients by April 1, 2024, and for existing clients by June 1, 2024.
Text
SEBI has prescribed uniform documents including account opening form, rights and obligations, risk disclosure documents, guidance note, policies and procedures, and tariff sheet. A copy of these documents is required to be provided by the broker to the clients free of charge.
Brokers shall inform a standard Most Important Terms and Conditions (MITC) which shall be acknowledged by the client.
The form, nature of communication, documentation and detailed standards for implementation of MITC shall be published on or before January 01, 2024, by the Brokers’ Industry Standards Forum (ISF), under the aegis of stock exchanges, in consultation with SEBI.
In the event that the ISF is unable to publish the same, as above, in whole or in part, then SEBI, may, at its discretion, publish standards in respect of the same.
Additional clause 20.1.6 'Most Important Terms and Conditions' may be incorporated in the master circular and 20.4 of the master circular stands amended to require client acknowledgement of MITC.
For onboarding of new clients, the date of the implementation and compliance by the market participants shall be April 01, 2024.
For existing clients, the MITC shall be informed to clients via email or any other suitable mode of communication (which can be preserved) by June 01, 2024.
Stock exchanges are directed to bring the provisions of this circular to the notice of stock brokers, and also disseminate the same on their websites.
Stock exchanges are directed to make amendments to the relevant bye-laws, rules and regulations for the implementation of the above provisions.
Stock exchanges are directed to publish the implementation standards on their websites.
Stock exchanges are directed to communicate to SEBI, the status of the implementation of the provisions of this circular in their monthly development report.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 30 of SEBI (Stock Brokers) Regulations, 1992 and Regulation 51 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018.
Source: SecMarx — Most Important Terms and Conditions (MITC). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.