SEBI CIRCULARSEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/73 dated 19-05-2023
Subject – Risk disclosure with respect to trading by individual traders in Equity Futures & Options Segment
1. Over time there has been increased participation of investors in Indian securities market, including, in the derivatives segment. While investors are expected to make investment decisions based on their own due diligence and risk appetite, it is important to empower them with detailed information about the risks associated with trading in derivatives.
2. With a view to facilitating informed decision making by the investors trading in derivatives segment, it has been decided to introduce ‘Risk disclosures’ with respect to trading in equity Futures & Options (F&O) segment.
3. Accordingly, all stock brokers shall display the ‘Risk disclosures’ given at Annexure-I on their websites and to all their clients in the manner as specified below:
3.1. 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.
3.2. The ‘Risk disclosures’ shall be displayed prominently, covering at least 50 percent area of the screen.
4. All Qualified Stock Brokers (QSBs) shall maintain the Profit and Loss (P&L) data of their clients on continuous basis as per the format given at Annexure-II. The P&L data of the clients shall be retained for at least 5 years.
5. Stock Exchanges and Depositories are directed to:
5.1. bring the provisions of this circular to the notice of their members / participants and also disseminate the same on their websites;
5.2. display the ‘Risk disclosures’ on their respective websites, with a link to study conducted by SEBI.
6. Applicability: The provisions of this circular shall come into force with effect from July 01, 2023.
7. 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 market.
8. This circular is available on SEBI website at www.sebi.gov.in under the category “Circulars”.
Yours faithfully,
Aradhana Verma
General Manager
Market Intermediaries Regulation and Supervision Department
Tel. No.: +91-022 26449633 Email: aradhanad
