Modification of Client Codes post Execution of Trades on National and Regional Commodity Derivatives Exchanges– Clarification

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... wing clarifications are issued: (i) Classification of genuine errors: The following shall be classified as genuine errors for the purpose of client code modification:- a. Error due to communication and / or punching or typing such that the original client code / name and the modified client code / name are similar to each other. b. Modification within relatives ( Relative for this purpose would mean as defined under Companies Act, 2013) (ii) Error Account: a. Shifting of trades to the Error account of broker would not be treated as modification of client code, provided that trades in Error account are subsequently liquidated in the market and not shifted to some other code. b. Further, broker shall disclose the co .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... iginal client code / name and the modified client code / name are similar to each other. b. Modification within relatives ( Relative for this purpose would mean as defined under Companies Act, 2013) 3. Error Account: a. Shifting of trades to the Error account of broker would not be treated as modification of client code, provided that trades in Error account are subsequently liquidated in the market and not shifted to some other code. b. Further, broker shall disclose the codes of accounts which are classified as Error accounts to the Exchanges. Each broker should have a well-documented error policy approved by the management of the broker. Exchanges shall periodically review the trades flowing to the error accounts of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... to ascertain whether the modifications of client codes are being carried on as per the strict objective criteria set by the Stock Exchange. Appropriate disciplinary action shall be taken by the Exchange, if any deficiency is observed. 5. Waiver of Penalty a. Exchanges may waive penalty for a client code modification where broker is able to produce evidence to the satisfaction of the exchange to establish that the modification was on account of a genuine error. However, not more than one such waiver per quarter may be given to a broker for modification in a client code. Explanation: If penalty wavier has been given with regard to a genuine client code modification from client code AB to client code BA, no more penalty waivers shal .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X