Confidentiality of client information

General Manager
Secondary Market Depository,
Research & Publications Department
e-mail : pkb@sebi.gov.in

The Executive Directors/Managing Directors
All the stock exchanges
Dear sir/madam

Sub:-confidentiality of client information

This is in continuation of our earlier circular no. SMDRP/Policy/CIR-39/2001 dated July 18, 2001 requiring that every investor should have a unique ID. In the same circular we had advised that a new para no. 7 also be added in the member-client agreement to ensure the confidentiality of the information submitted by the client to the broker. In this regards, it is advised that the words "with prior intimation to SEBI" be dropped from the clause.

We have also been receiving representations from market participants where they would like to share client information so as to better manage client accounts. In view of the representations, it has been decided to include the following proviso to this clause in the Member Client Agreement:-

"Provided however, that the broker shall be allowed to share the details of the client as mentioned in the client registration form or any other information pertaining to the client with parties / entities other than required under law with the express permission of the client."

Accordingly, the clause No. 7 would now read as follows:

"The member hereby undertake to maintain, the details of the client as mentioned in the client registration form or any other information pertaining to client, in confidence and that he shall not disclose the same to any person/entity except as required under the law.

Provided however, that the broker shall be allowed to share the details of the client as mentioned in the client registration form or any other information pertaining to the client with parties / entities other than required under law with the express permission of the client."

You are advised to ensure the implementation of the above decision.

Thanking you,

Yours faithfully
 
 

P K Bindlish