N O T I C E
Dated: September 28, 2016
Trading
members are hereby informed that the Exchange has received a Circular from SEBI
vide Ref. No.
SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 September 26,2016 regarding
Enhanced Supervision
of Stock Brokers/Depository Participants. The contents of the said circular are
reproduced hereunder for information of trading members.
Quote:
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CIRCULAR
SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 September 26, 2016
The Managing Directors of all Recognized Stock
Exchanges and Depositories
Dear Sir/Madam,
Subject: Enhanced Supervision of Stock
Brokers/Depository Participants
1. SEBI constituted a committee on
“Enhanced Supervision of Stock Brokers”, which included representatives from
Stock Exchanges, Depositories and Brokers. With a view to implement the
recommendations, the guidelines as Annexed to this circular are being issued.
These guidelines cover the following broad areas:
I. Uniform nomenclature to be followed by
stockbrokers for Naming/Tagging of Bank and Demat Accounts and the reporting of
such accounts to the Stock Exchanges/Depositories.
II. Monitoring of Clients’ Funds lying
with the Stock Broker by the Stock Exchanges, through a sophisticated alerting
and reconciliation mechanism, to detect any mis-utilisation of clients fund.
III. Changes in the existing system of
internal audit for stock brokers/depository participants viz. appointment,
rotation of Internal Auditors, formulation of objective sample criteria,
monitoring of quality of Internal Audit Reports, timeline for submissions of
Internal Audit Reports, etc.
IV. Monitoring of
Financial Strength of Stock Brokers by Stock Exchanges so as to detect any
signs of deteriorating financial health of stock brokers and serve as an early
warning system to take preemptive and remedial measures.
V. Imposition of uniform
penal action on stock brokers/depository participants by the Stock
Exchanges/Depositories in the event of non-compliance with specified
requirements.
VI. Other Requirements:
a. Uploading client's
funds and securities balances by Stock Brokers to Stock Exchange System and
onwards transmission of the same to the clients for better transparency.
b. Clarification on Running Account
Settlement
c. Providing PAN details
of Directors, Key Management Personnel and Dealers, to Stock Exchanges and any
change thereof.
2. The Stock Exchanges/Depositories are
directed to:
a. Bring the provisions
of this circular to the notice of the Stock Brokers/depository participants and
also disseminate the same on their websites.
b. Make necessary
amendments to the relevant bye-laws, rules and regulations for the
implementation of the above directions in co-ordination with one another to
achieve uniformity in approach.
c. Communicate to SEBI, the status of the
implementation of the provisions of this circular in their Monthly Development
Reports.
3. This circular is issued in exercise of
powers conferred under Section 11(1) of the Securities and Exchange Board of
India Act, 1992 to protect the interest of investors in securities and to
promote the development of and to regulate the securities market.
Yours faithfully,
Debashis Bandyopadhyay
General Manager
Market Intermediaries Regulation and
Supervision Department
Encl. : Annexure
Trading
Members are requested to take note of the aforesaid guidelines of SEBI and act
accordingly.
M.A.V. Raju
General Manager