Changes in clients trade details to attract penalty- SEBI

Market regulator SEBI today warned brokers that any change in trade details of clients after execution would attract monetary penalty if the reason is not genuine. The decision has been taken to check any possible fraudulent activities by changing client details in the name of error and wrong data entry.

“Stock exchanges are advised to impose monetary penalty in addition to disciplinary action against members who do not meet the laid down objective parameters,”the Securities and Exchange Board of India (SEBI) said in a circular.

It further said that stock exchanges can permit modifications to client code post trade execution only in case of genuine error or wrong data entry made by trading members.

“This facility has been provided for smooth functioning of the system and is expected to be used more as an exception rather than routine,”SEBI added.

The market regulator also asked stock exchanges to set objective parameters for identification of client code modifications arising as a result of genuine error or wrong data entry.

“These objective parameters should be approved by the Governing Board of the Exchange and disclosed to the trading members,”SEBI said.