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General
Manager Market
Regulation Department – Policy Email:-sundaresanvs@sebi.gov.in MRD/DoP/SE/Cir-20/2005 The Executive Directors/Managing
Directors/Administrators Of All Stock Exchanges Dear Sir /
Madam, Sub: Electronic issuance of contract notes –
Additional conditions 1.
Please
refer to SEBI circulars No. SEBI/SMD/SE/15/2003/29/04
dated 2.
It
is hereby specified that in addition to the conditions specified in the
aforesaid circulars and the provisions of the Information Technology Act, 2000
(IT Act, 2000), all the members of stock exchanges who are desirous of issuing
Electronic Contract Notes (ECNs) to their clients shall comply with the
following conditions:- 2.1 Issuing ECNs when specifically consented The digitally signed ECNs may be
sent only to those clients who have opted to receive the contract notes in an
electronic form, either in the Member – Client agreement / Tripartite
agreement or by a separate letter. The mode of confirmation shall be as per the
agreement entered into with the clients. 2.2 Where to send ECNs The usual mode of delivery of ECNs
to the clients shall be through e-mail.
For this purpose, the client shall provide an appropriate e-mail account
to the member which shall be made available at all times for such receipts of
ECNs. 2.3 Requirement of digital signature All ECNs sent through the e-mail
shall be digitally signed, encrypted, non-tamperable and shall comply with the
provisions of the IT Act, 2000. In case the ECN is sent through e-mail as an
attachment, the attached file shall also be secured with the digital signature,
encrypted and non-tamperable. 2.4 Requirements for acknowledgement, proof of delivery, log
report etc. 2.4.1 Acknowledgement The acknowledgement of the e-mail
shall be retained by the member in a soft and non-tamperable form. 2.4.2 Proof of delivery
i.
The
proof of delivery i.e., log report generated by the system at the time of
sending the contract notes shall be maintained by the member for the specified
period under the extant regulations of SEBI/stock exchanges and shall be made
available during inspection, audit, etc.
ii.
The
member shall clearly communicate to the client in the agreement executed with
the client for this purpose that non-receipt of bounced mail notification by
the member shall amount to delivery of the contract note at the e-mail ID of
the client. 2.4.3 Log Report for rejected or bounced mails
i.
The
log report shall also provide the details of the contract notes that are not
delivered to the client/e-mails rejected or bounced back.
ii.
Also,
the member shall take all possible steps (including settings of mail servers,
etc) to ensure receipt of notification of bounced mails by the member at all
times within the stipulated time period under the extant regulations of
SEBI/stock exchanges. 2.5 When to issue or send in
Physical mode 2.5.1 Issue in Physical mode In the case of those clients who do
not opt to receive the contract notes in the electronic form, the member shall
continue to send contract notes in the physical mode to such clients. 2.5.2 Send in Physical mode Wherever the ECNs have not been
delivered to the client or has been rejected (bouncing of mails) by the e-mail
ID of the client, the member shall send a physical contract note to the client
within the stipulated time under the extant regulations of SEBI/stock exchanges
and maintain the proof of delivery of such physical contract notes. 2.6 General requirements 2.6.1 ECNs through website In addition to the e-mail
communication of the ECNs in the manner stated above, in order to further
strengthen the electronic communication channel, the member shall
simultaneously publish the ECN on his designated web-site in a secured way and
enable relevant access to the clients. 2.6.2 Access to the website In order to enable clients to access
the ECNs posted in the designated website in a secured way, the member shall
allot a unique user name and password for the purpose, with an option to
the client to access the same and save the contract note electronically or take
a print out of the same. 2.6.3 Preservation/Archive of electronic documents The member shall retain/archive such
electronic documents as per the extant rules/regulations/circulars/guidelines
issued by SEBI/Stock Exchanges from time to time. 3. The Stock Exchanges are advised to 3.1 make necessary amendments to the
relevant bye-laws, rules and regulations for the implementation of the above
decision immediately. 3.2 bring the provisions of this circular to
the notice of the member brokers/clearing members of the Exchange and also to
disseminate the same on the website. 3.3 communicate to SEBI, the status of the
implementation of the provisions of this circular in Section II, item no. 13 of
the Monthly Development Report. 4.
This
circular is being 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. Yours
faithfully, V |
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