The Securities and Exchange Board of India (Sebi) has directed stock brokers to publish a narrow list of terms and conditions labelled as ‘most important terms and conditions’ (MITC) to convey risks, tariffs, and policy-related information in an easy format to investors.
Investors and clients of the broker will be required to acknowledge these new truncated conditions.
Sebi has directed the Brokers’ Industry Standards Forum to publish the detailed standards by January 1, 2024, after consultation. However, if the body fails to do so, then the market regulator will publish the standards itself.
Stock brokers would have to convey the same to existing investors by June 1, 2024, while new investors must be informed about MITC from April 1, 2024.
At present, stock brokers have to give a copy of the documents on rights and obligations, risk disclosure documents, guidance notes, policies and procedures, tariff sheets, etc.
“Typically, these documents are voluminous, and investors may lose focus on critical aspects of the relationship with the broker,” said Sebi.
First Published: Nov 13 2023 | 6:48 PM IST
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