Disclose Prop Trading, Commodity Brokers Told
To increase transparency in the markets, Sebi on Monday asked commodity brokers to make disclosures about proprietary trading to clients. The move is aimed at increasing transparency in dealings between brokers and clients in commodity derivatives market. In a circular, the market regulator said every commodity broker will have to disclose to the client whether such broker does client-based business or proprietary trading as well. The broker will have to disclose this information upfront to the new clients at the time of entering the Know Your Client (KYC) agreement. In case a broker presently does not trade on proprietary account, but chooses to do so at a later date, s/he will be required to disclose this to clients before carrying out any proprietary trading.