Sebi clarifies on format for seeking clients’ trading preferences

financialexpress.com:

Capital market regulator Sebi on Tuesday clarified that new format for seeking clients’ trading preferences prescribed by it last month will not be applicable to members registered exclusively with commodity derivatives exchanges.Such members will use the format as prescribed by erstwhile Forward Markets Commission (FMC) in February 2015, the Securities and Exchange Board of India (Sebi) said in a circular.Under the format, the member must specify the names of the exchanges where the member has membership, date of consent for trading on the concerned exchange and signature of the client.

In case of allowing a client for trading on any other exchange at a later date, which is not selected now, a separate consent letter is required to be obtained by the member from the client and to be kept as an enclosure with this document.”In view of the fact that in case of commodity derivatives exchanges, overlap of traded commodities between them is low at this point of time, it is hereby clarified that …format of ‘Trading Preferences’ as specified in Sebi circular dated June 21, 2023, shall not be made applicable to members registered exclusively with commodity derivatives exchanges,” it added.

Also, it clarified that opting out facility should be provided to new as well as existing clients, and negative consent should be obtained separately from clients in writing. Stock brokers will be mandated to maintain records of such written negative consent provided by the clients for at least five years.In June, Sebi came out with a standard format for seeking trading preference of clients to be provided to their respective stock brokers for the same product in different exchanges.