Making the investor account opening process easier for stock brokers, markets regulator Sebi has allowed them to provide certain standard documents in the electronic format after obtaining the client's consent. These bulky documents, including Rights and Obligations of stock broker, sub-broker and clients, as also that of beneficial owner and depository participant, the Uniform Risk Disclosure Documents and Guidance Note detailing Do's and Don'ts for trading on stock exchanges, need to be mandatory provided in the physical format.
The move would also help investors as it could be easier for them to store and refer to these documents in electronic format. However, the brokers would have to provide physical copies of these documents if the investors desire so.
The new direction would come into effect for all new clients from August 1, 2016.
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In a circular, Sebi said: "In consultation with market participants, with a view to simplify the account opening kit, it has been decided that, stock broker/depository participant shall make available these standard documents to the clients, either in electronic or physical form, depending upon the preference of the client as part of account opening kit.
"The preference of the client shall be sought as part of the account opening form. In case the documents are made available in electronic form, stock broker/ depository participant shall maintain logs of the same."
Sebi said the stock exchanges, depositories, stock brokers and depository participants would continue to make these documents available on their website and keep the clients informed about the same.
