What are requirements for a Member with regard to the conduct of his business?
The derivatives member is required to adhere to the code of conduct specified under the SEBI Broker Sub-Broker regulations. The following conditions stipulations have been laid by SEBI on the regulation of sales practices:
o Sales Personnel: The derivatives exchange recognizes the persons recommended by the Trading Member and only such persons are authorized to act as sales personnel of the TM. These persons who represent the TM are known as Authorised Persons.
o Know-your-client: The member is required to get the Know-your-client form filled by every one of client.
o Risk disclosure document: The derivatives member must educate his client on the risks of derivatives by providing a copy of the Risk disclosure document to the client.
o Member-client agreement: The Member is also required to enter into the Member-client agreement with all his clients.
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07-03-2008, 12:16 PM
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