The Hindu Business Line : SEBI asks brokers to disclose nature of business

IN a bid to increase transparency in the business of stock market intermediaries, the Securities and Exchange Board of India today made it mandatory for brokers to tell their clients the nature of their business.

The capital markets regulator said a broker should disclose to his client whether he does client - based business or proprietary trading as well.

The broker shall disclose the information to his existing clients within a period of one month from today and upfront to new clients at the time of entering into the `Know Your Client' agreement, a SEBI circular said today. In the case of a broker who at present does not trade on proprietary account, but chooses to do so at a later date, he shall be required to disclose this to his clients before carrying out any proprietary trading.

The regulator has asked the stock exchanges to make necessary amendments to the relevant by-laws, rules and regulations for the implementation of the decision immediately.

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