9th July, 2008


Sub: “In-person” verification of Clients by their Stock Brokers

Members are hereby informed that the Exchange has received a letter Circular Ref. No. MIRSD/DPS-III/130466/2008 dated  July 2, 2008 from SEBI.  The contents of the said letter are given here under for information of the members.




You are aware that SEBI vide its Circular No. SMD/POLICY/CIRCULARS/5-97 dated April 11,1997 had prescribed the uniform formats of Client  Registration Form and Broker-Client Agreements. Furhter, SEBI vide Circular No. FITTC/DC/CIR-3468/98 dated December 03, 1998 had prescribed Clients Registration Forms, Clients’ Agreemtns and Risk Disclosure Documents for Derivative Segments.


Subsequently, SEBI vode Circular No. ISD/CIR/RR/AML/106 dated January 18, 2006 and ISD/CIR/RR/AML/2/06 datd March 20, 2006 had empahsized on Customer Due Dilignece and the guidelines on anti-money laundering to be followed by the intermediaries. Further, SEBI vide Circular No. SEBI/MIRSD/DPS-1/Cir-31/2004 dated August 26, 2004 issued Uniform Documentary Requirements for trading to the Exchanges.


SEBI  has repeatedly emphasized that it shall be the responsiblitly of the stock broker to satisfactorily identify  his clients and it  would be stock broker’s responsibility  to provide clients details as and when required.


In continuation of  the above thrust for ensuring compliance, it is reiterated that  it shall be the responsibility of stock brokers to ensure in-person verification by its own staff while registering the client under KYC norms and keep complete audit trail for the same.


In view of the  above, you are advised to direct your stock brokers to ensure ‘in-person’ verification by the stock broker’s  staff only while registering the clients and that this function is not outsourced.



Yours faithfully,



MANOJ KUMAR                          





Members  are requested to note the aforesaid guideline of SEBI and act accordingly.