Clarification on circular dated December 3, 2009 on ‘Dealings between a Client and a Stock broker’
Summary
This SEBI circular modifies the requirements for the renewal of Running Account Authorisation between clients and stock brokers. Specifically, it deletes Clause 12(a) regarding annual renewal and revises Clause 12(c) to allow clients to revoke authorisation at any time. Stock exchanges are directed to notify these changes to brokers and amend their bye-laws accordingly.
Text
Clause 12(a) of the aforesaid annexure pertaining to renewal of authorisation stands deleted.
The authorisation shall be dated and shall contain a clause that the clients may revoke the authorisation at any time. The stock brokers, while sending periodical statement of accounts to the clients, shall mention therein that their running account authorisation would continue until it is revoked by the clients.
The Stock Exchanges are directed to bring the provisions of this circular to the notice of the stock brokers and also disseminate the same on their websites.
The stock exchanges shall also make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
The circular shall come into force from date of this circular.
Source: SecMarx — Clarification on circular dated December 3, 2009 on ‘Dealings between a Client and a Stock broker’. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.