MANU/SSMD/0047/2011

Ministry : Securities and Exchange Board of India

Department / Board : Market Intermediaries Regulation and Supervision Department

Circular No. : CIR/MIRSD/16/2011

Date : 22.08.2011

Notification/ Circulars Referred: No. SEBI/MIRSD/DPS-1/Cir-31/2004 dated August 26, 2004 MANU/SSMD/0056/2004; No. MIRSD/SE/Cir-19/2009 dated December 3, 2009 MANU/SSMD/0040/2009; No. CIR/MRD/DP/25/2010 dated August 27, 2010 MANU/SSMD/0063/2010; No. CIR/MRD/DP/26/2010 dated August 27, 2010 MANU/SSMD/0064/2010

Citing Reference:
No. SEBI/MIRSD/DPS-1/Cir-31/2004 dated August 26, 2004 MANU/SSMD/0056/2004 Modified No. MIRSD/SE/Cir-19/2009 dated December 3, 2009 MANU/SSMD/0040/2009 Modified No. CIR/MRD/DP/25/2010 dated August 27, 2010 MANU/SSMD/0063/2010 Modified No. CIR/MRD/DP/26/2010 dated August 27, 2010 MANU/SSMD/0064/2010 Modified

Dear Sirs,

Simplification and Rationalization of Trading Account Opening Process

1. SEBI has been getting feedback from the investors that the present trading account opening procedure is very cumbersome. The investor has to enter into a number of agreements depending on his trading preferences i.e. stock exchanges, segments, internet / wireless technology based trading, etc. As a result, it requires a large number of signatures on various documents devised by the stock brokers/trading members.

2. With a view to simplify and rationalize the account opening process, we have reviewed, consolidated and updated all the documents/requirements prescribed in respect of account opening process over the years, in consultation with major stock exchanges and market participants. The simplification includes replacement of all client-broker agreements with the 'Rights and Obligations' document, which shall be mandatory and binding on the existing and new stock brokers (including trading members) and clients. Accordingly, SEBI (Stock Broker and Sub-Broker) Regulations, 1992 have been amended suitably vide notification No. LADNRO/GN/2011-12/19/26273 dated August 17, 2011.

3. SEBI has devised the uniform documentation to be followed by all the stock brokers / trading members; a copy thereof to be provided by them to the clients. The details of such documents are listed below: