The Securities and Exchange Board of India (SEBI) on May 19, 2023, issued a Circular regarding the Risk disclosure with respect to trading by individual traders in Equity Futures & Options Segment.
This Circular aims to protect the interests of investors in securities and to promote the development and regulate the securities market.
The provisions of this circular shall come into force with effect from July 01, 2023.
The following has been stated namely: -
• It states that in order to facilitate informed decision-making by the investors trading in the derivatives segment, it has been decided to introduce ‘Risk disclosures with respect to trading in equity Futures & Options (F&O) segment
• It states that All the stock brokers shall display the ‘Risk disclosures’ given in Annexure-I on their websites and to all their clients in the manner as follows namely: -
(i) Upon login into their trading accounts with brokers, the clients may be prompted to read the ‘Risk disclosures’ (which may appear as a pop-up window upon login) and shall be allowed to proceed ahead only after acknowledging the same.
(ii) The ‘Risk disclosures’ shall be displayed prominently, covering at least 50 percent area of the screen.
(iii) All Qualified Stock Brokers(QSBs) shall maintain the Profit and Loss (P&L) data of their clients on a continuous basis as per the format given in Annexure II.
(iv) The P&L data of the clients shall be retained for at least 5years
• It further directs the Stock Exchanges and Depositories to perform the following namely: -
(i) bring the provisions of this circular to the notice of their members/participants and also disseminate the same on their websites.
(ii) display the ‘Risk disclosures’ on their respective websites, with a link to a study conducted by SEBI.
• This circular is available on the SEBI website at www.sebi.gov.in under the category "Circulars"
[Circular No. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/73]
