September 29, 2012
Trading Members of the Exchange are hereby informed that the Exchange has received a Circular from SEBI vide Ref. No. CIR/MIRSD/ 11 /2012, dated September 5, 2012 issuing certain clarification, regarding operational issues in implementation of SEBI earlier circular for Know Your Client requirement for foreign investors. The contents of the said Circular are reproduced hereunder for information and necessary action of Trading Members.
CIR/MIRSD/ 11 /2012 September 5, 2012
1.Stock Brokers through Recognized Stock Exchanges
2. Depository Participants through Depositories
3. Mutual funds
4. Association of Mutual Funds in India
5. Portfolio Managers
6. KYC Registration Agencies (KRAs)
7. Alternative Investment Funds (AIFs)
8. Collective Investment Schemes (CIS)
1. This has reference to SEBI circulars No CIR/MIRSD/16/2011 dated August 22, 2011 and MIRSD/SE/Cir-21/2011 dated October 5, 2011 on know your client norms for the securities market.
2. SEBI has received representations regarding operational issues in the implementation of aforesaid SEBI Circulars in case of foreign investors viz. Foreign Institutional Investors, Sub Accounts and Qualified Foreign Investors. In consultation with the Stock Exchanges, Depositories and Intermediaries, certain clarifications are issued, as given in Annexure A, with respect to these investors.
3. Further, the intermediaries shall strictly follow the risk based due diligence
approach as prescribed by SEBI Master Circular on AML No. CIR/ISD/AML/ 3/2010 dated December 31, 2010. Also, they shall conduct ongoing client due diligence based on the risk profile and financial position of the clients as prescribed in the Circular.
4. The provisions of this circular are applicable for both new and existing clients.5. 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 interests of investors in securities and to promote the development of, and to regulate the securities market.
Deputy General Manager
Trading Members are requested to take note of the aforesaid clarification of of SEBI and ensure compliance. This circular & Annexure-A mentioned therein are available on SEBI website at www.sebi.gov.in.
Deputy General Manager