SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, A Wing, Gr. Floor,
224, Nariman Point, Mumbai 400 021
SMD/POLICY/CIRCULAR/10-97
April 11, 1997
To
The Executive Directors /Managing Directors
of all Stock Exchanges
Dear Sir,
SUB : Know Your Client
Please refer to SEBI circular no. SMD/POLICY/CIR/5-97 dated April 11, 1997 regarding "Know Your Client" wherein standard format for the Client - Registration Form and the Member - Client Agreement had been prescribed.
In view of the profile of the small investor, an exemption may be made for the Annual Income, Income Tax No. and Market Value of Portfolio details at point nos. 9, 10 and 11 of the Individual Client Registration Application Form, in cases where the Annual Gross Turnover (i.e. Purchases + Sales of securities) of the client is not more than Rs. 500,000/- (Rupees Five Lakhs).
In cases where the client’s Gross Turnover is more than Rs. 500,000/- it is desirable that the broker gets the above details. However, the broker may at his discretion waive the above requirements in cases where he is personally satisfied about the risk profile of the client.
The requirement of Client Registration and the Member - Client Agreement may be waived for SEBI registered FIIs/ FIs/ MFs that already have agreements with the brokers. In such cases a copy of the agreement will have to be provided by the broker as and when necessary.
Yours faithfully,
O. P. GAHROTRA
SENIOR EXECUTIVE DIRECTOR
SECONDARY MARKET DEPARTMENT
cc to
a] Chairman’s Secretariat.
b] All Executive Directors, Division Chiefs and Regional Managers of SEBI.
c] All SEBI Nominee Directors on the Board of Exchanges.
d] All Division Chiefs requested to circulate to all their officers.
Note :
- SMD Stock Exchange Administration Division to follow-up with the Exchanges for implementation of the decisions.
- All the SEBI Nominee Directors on the Board of the Exchanges to follow-up the issues in the Board Meeting of the Exchanges.