SEBI asks brokers to hold on to client call records for 3 years

Our Bureau Mumbai | Updated on January 09, 2018 Published on December 01, 2017

But in the case of disputes, files need to be kept till resolution

With a view to curb spike in unauthorised trading activity by stock brokers, SEBI has asked them to keep records of any form of communication, including telephonic, with clients for three years. Client or investor complaints against brokers misusing their funds and indulging in unauthorised trading has piled up with SEBI.

While SEBI this year asked brokers to maintain records of client calls, no time period was specified. Broker associations requested SEBI to make maintenance of client instruction details time-bound for practical purposes.

But in the case where disputes arise, SEBI said brokers should maintain such records till the final resolution of the dispute.

The evidence could be physical record written and signed by the client, telephone recording, e-mail from authorised ID, log of Internet transactions, record of SMS messages or any other legally verifiable record. SEBI reiterated that the onus will be on brokers to produce proof of client activity in the event of any dispute arising out of a stock trade.

However, in exceptional cases such as technical failure, where the broker fails to produce order-placing evidence, the broker will have to justify it with reasons for the same and depending upon merit and other appropriate evidence, such as post-trade confirmation by the client in respect of the disputed trade, the case will be considered, SEBI said.

Published on December 01, 2017
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