Sebi proposes standard format on trading preference for different exchanges

The Securities and Exchange Board of India (Sebi) has prescribed a standard format for seeking the trading preference of clients for the same product in different exchanges. Based on the representations received and in consultation with stock exchanges, the market regulator said this has been decided to ensure that clients are permitted to access all the stock exchanges in which the brokers are registered for the same segment.

The provisions of this circular will come into force from August 01, 2023

Currently, clients need to give separate authorisation/letters in case they want to trade on different stock exchanges for a particular segment.

Under the new mechanism, all stock brokers are mandated to register their new clients on all the active stock exchanges after obtaining the trading preferences as per format. For existing clients, the brokers are mandated to offer them access to all the active stock exchanges for the segments already opted by them, as a default mode, within three months and inform their clients through email/ SMS.

The stock brokers will also provide a choice to their clients to opt out of such access by providing negative consent in this regard, and thereafter, the brokers will activate/ deactivate the segments based on the preference of their clients.

Clients will be given a choice to opt out of such access by providing negative consent, and the stock brokers shall activate/deactivate the segments based on the preference of clients.

Further, the regulator also directed the exchanges to monitor the implementation and compliance of this circular through half-yearly internal audit and inspection of the stock brokers and communicate the same to the regulator through their monthly development report.

According to Tejas Khoday, Co-Founder & CEO at FYERS,  this will help prevent cumbersome duplication of efforts for investors and brokerages. It will also enable traders to access the same segments across all exchanges seamlessly.

"For example, those interested in trading currencies can switch between BSE and NSE. Similarly, people interested in trading commodities can access both MCX and NSE without the hassles of activating segments separately. So, it's likely a win-win for everyone," Khoday told CNBC-TV18.com.