SEBI Issues Circular Standardizing Format on Trading Preference for Different Exchanges

SEBI Issues Circular Standardizing Format on Trading Preference for Different Exchanges

The Securities and Exchange Board of India has prescribed a standard format for seeking trading preference of clients for same product in different exchanges.

At present, clients are required to submit separate authorization/letters in case they want to trade on different stock exchanges for a particular segment.

As a result of the representations received and consultations with the stock exchanges, SEBI has decided to standardize the format of the ‘Trading Preferences’ in order to make sure that all clients have the opportunity to access all stock exchanges in which the brokers are registered for the same segment.

The provision shall come into effect from 1 August, 2023.

Under the new mechanism, all stock brokers are mandated to register their new clients on all the active stock exchanges after obtaining the trading preferences as per format.

The stock brokers are mandated to offer access to existing clients on 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, as per the circular.

Clients shall be given a choice to opt out of such access by providing negative consent and the stock brokers must activate or deactivate the segments based on the preference of the clients, said SEBI.

In addition to these, the market watchdog has directed the exchange platforms to monitor the implementation and compliance of this circular through half-yearly internal audit and inspection of the stock brokers and communicate the same to the regulator through their monthly development report.