Dis­close Prop Trad­ing, Com­mod­ity Bro­kers Told

The Economic Times - - Economy: Macro, Micro & More -

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.


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