Capital markets regulator Sebi on Monday asked brokers to inform a standard “most important terms and conditions” to clients, which will be acknowledged by them.

The form, nature of communication, documentation, and detailed standards for implementation of “most important terms and conditions or MITC” will be published by January 1, 2024, by the Brokers’ Industry Standards Forum (ISF), under the aegis of stock exchanges, in consultation with Sebi, according to a circular by the regulator.

In case ISF is unable to publish the document, in whole or in part, then Sebi, at its discretion, will publish the standards and norms.

To onboard new clients, the date of the implementation and compliance by the market participants will be April 1 and for existing clients, the MITC will inform them through email or any other suitable mode of communication by June 1.

In May, Sebi prescribed the uniform documents for formalising the broker-client relationship. These documents included an account opening form, rights and obligations, risk disclosure documents, guidance notes, policies and procedures, and tariff sheets.

A copy of these documents is required to be provided by the broker to the clients free of charge.

Generally, these documents are voluminous and investors may lose focus on critical aspects of the relationship with the broker.

PTI