Introduction
The Securities and Exchange Board of India (SEBI) works diligently to make trading conditions easier and fair for stockbrokers and traders alike. In another welcome move, SEBI has revised its guidelines that allow stockbrokers (under certain conditions) to provide a common mobile number or email address for multiple clients. The framework was updated to maintain regulatory compliance and operational convenience. Read more about this legislation and understand the changes.
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The Recommendation
As per the new SEBI guideline, which was released on 3rd December 2024, “Stockbrokers shall ensure that separate mobile number/email address is uploaded for each client. However, under exceptional circumstances, the stockbroker may, at the specific written request of a client, upload the same mobile number/email address for more than one client provided such clients belong to one family. ‘Family, for this purpose, would mean self, spouse, dependent children, and dependent parents.”
Essentially, the rule says every individual should have a unique phone number and email address for their stock booking account. However, there are certain exceptions. As per the exception, stockbrokers are allowed to use a common phone number and email address for certain clients. This request must come in writing from the client before the change is applicable.
The new SEBI guideline alters its previous circulars from 2011 and August 2024, due to the recurring concerns raised by participants, especially the Brokers' Industry Standards Forum (ISF). As per the latest circular, to authenticate the directive of the shared contact information, all approvals must come with written consents.
To ease the execution of these directives and notify members of the adjustments, the regulatory body has instructed stock exchanges to amend the related bylaws, rules, and regulations.
What are the Exceptions
As per the new SEBI guideline, to use the same email address and phone number:
- All members must be from the same family. So, in your case, it will be you, your spouse, and any dependents you have such as children and parents.
- In case of non-individual clients, only authorised representatives can avail the shared contact information. Authorised representatives could be the head of the family (or karta) in a HUF.
- In case of a trust, it can be the beneficiary or trustee.
- In a partnership firm, it can be a partner or any representative who is named as a designated contact by any business.
- For corporates, it can be the designated person approved by the board to operate the trading account.
Conclusion
As per the new circular passed by SEBI, stockbrokers can, under certain conditions, use a common phone number and email in case if the client requests for the same in writing. This exception will help ease operations and maintain compliance in the stock market.
Reference
“SEBI | SMS and Email Alerts to Investors by Stock Exchanges.” 2024. https://www.sebi.gov.in/legal/circulars/dec-2024/sms-and-email-alerts-to-investors-by-stock-exchanges_89241.html.\
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