MIRSD/ SE /Cir-19/2009

December 3, 2009

Dear Sir,

1. This is in continuation of circulars (a) No. SMD/SED/CIR/93/23321 dated November 18,

1993 specifying the norms for regulation of transactions between clients and brokers, (b)

No. SEBI/MIRSD/DPS-1/Cir-31/2004 dated August 26, 2004 specifying the model

format for the Member Clients Agreements, and (c) No. MRD/DoP/SE/Cir-20/2005 dated

September 8, 2005 specifying the conditions for issuing electronic contract notes.

2. With a view to instill greater transparency and discipline in the dealings between the

clients and the stock brokers, it has been decided, in consultation with Investor

Associations, Secondary Market Advisory Committee of SEBI (SMAC), market

participants and major stock exchanges, that the stock brokers shall comply with the

requirements as annexed to this circular.

3. The stock brokers shall take necessary steps to implement this circular immediately and

ensure its full compliance in respect of all clients – existing or new – at the latest by 31st

March 2010.

4. The Stock Exchanges are directed to:

a. bring the provisions of this circular to the notice of the Stock Brokers and also

disseminate the same on their websites.

b. make necessary amendments to the relevant bye-laws, rules and regulations for

the implementation of the above decision in co-ordination with one another to

achieve uniformity in approach.

c. communicate to SEBI, the status of the implementation of the provisions of this

circular in their Monthly Development Reports.

5. This circular is issued in exercise of powers conferred under Section 11(1) of the

Securities and Exchange Board of India Act, 1992 to protect the interests of investors in

securities and to promote the development of, and to regulate the securities markets.

Yours faithfully,

Encl.: Annexure-A

CC: Investor Associations.