Sebi will impose a penalty on trading members for modifying client codes for non-institutional trades. According to a circular issued on Tuesday, exchanges have been directed to credit such penalty money to investor protection funds.
Further, a trading member will have to pay a penalty of two per cent of the value of the non-institutional trade where client codes have been modified, if such trades account for more than five per cent of the total turnover of non-institutional trades. If it is more than five per cent, the penalty would be one per cent.
According to the current norms, trading members can modify client codes after the execution of the trade to rectify a genuine error that had occurred while entering a client code at the time.
