Prevention of unauthorized trading by stock brokers




January 11, 2018


All recognized Stock Exchanges

Dear Sir/ Madam,


Prevention of Unauthorised Trading by Stock Brokers

1. SEBI vide circular No. CIR/HO/MIRSD/MIRSD2/CIR/P/2017/108 dated September 26,  2017 had prescribed  guidelines  for  prevention  of unauthorised trading    by    stock    brokers and issued subsequent    clarification    vide CIR/HO/MIRSD/MIRSD2/CIR/P/2017/124 dated November 30, 2017.

2. SEBI has now received   representations   from   BSE   Brokers   Forum   and Association  of  National  Exchanges  Members  of India,  expressing  difficulties faced  by stock  brokers in  the  implementation  of  the  aforesaid circulars and seeking extension for the implementation of the same.

3. In view of the above, it has been decided to make the aforesaid circulars effective from April  01,  Other  provisions  shall remain  unchanged  and  no further extension shall be granted for the implementation of the said circulars.

4. The Stock Exchanges are directed to:

a. bring the provisions of this circular to the notice of the Stock Brokers and also disseminate the same on their websites

b. make necessary amendments   to   the   relevant   bye-laws,   rules   and regulations for the  implementation of the above directions in co-ordination with one another to achieve uniformity in approach

c. communicate to SEBI, the status of the implementation of the provisions of this circular in their Monthly Development Reports.

5. This circular is  issued  in  exercise  of the  powers  conferred  by  Section  11  (1)  of Securities and  Exchange  Board  of  India  Act,  1992 to  protect  the  interest  of investors  in  securities  and  to  promote  the  development  of,  and  to regulate,  the securities market.

Yours faithfully,

Surabhi Gupta

Deputy General Manager

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