The Securities Exchange Board of India (SEBI) has released a new master circular for stock brokers. This 414-page circular includes all previous instructions and guidelines.
Key Points About Investor Alerts:
- Daily Alerts: Stock exchanges must send transaction details to investors via SMS and email by the end of each trading day.
- Applicable Segments: These rules apply to both equity cash and derivative segments of the stock exchanges.
- Client Information: Stock brokers must upload client details such as name, mobile number, address, and email. This should ideally sync with the UCC (Unique Client Code) update module.
- Employee Contact Info: Brokers must ensure that their employees’ or authorized persons’ contact details are not uploaded as client information.
- Unique Contacts: Each client must have a unique mobile number and email ID. However, clients from the same family (self, spouse, dependent children, and parents) can share contact details if requested in writing.
Investor Confirmation Process:
- Verification: After brokers upload client details, stock exchanges will verify by sending SMS and emails to the provided contacts.
- Physical Letters: Exchanges will also send letters to the addresses provided by brokers.
Once investors confirm their details, exchanges will start sending transaction alerts directly to them.
Funding the Service:
Stock exchanges can use 20% of the listing fees to cover the costs of providing these SMS and email alert services.
Other Details in the Circular:
The new circular also covers a wide range of topics, including broker registration, supervision, client dealings, investor grievance redressal, handling defaults, and compliance with foreign accounts tax laws.
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