Circular No: - NMCE/2011-12/0091 Date: - 06-Jan-2012
To,
The Members,
The Forward Markets Commission (FMC) vide their letter under reference No: Div.III/I/89/07 dated 16th December, 2011 has prescribed the Common / uniform client registration forms / process including Member Client Agreement, Risk Disclosure Document (RDD) and “Know your Client” (KYC) form, pursuant to the demand from Members as well as participants in commodity futures market. With the introduction of common client registration documents, the client will be required to fill in only one set of documents while registering for trading on multiple National Commodity Exchanges. Members shall take necessary steps to implement this circular in respect of new clients w.e.f. April 01, 2012.
1. For the purpose of registration of new clients, the Member shall make available a folder / booklet containing following documents. Members will have to ensure that a copy of the whole set is provided by them to the clients:
a. List of mandatory documents to be obtained from the clients.
i. Annexure 1 – Know Your Client application form (KYC)
ii. Annexure 2 – Uniform Risk Disclosure Document (RDD)
iii. Annexure 3 – Rights and Obligations of Members, Authorized Persons and Clients (R&O)
iv. Annexure 4 – Do’s and Don’ts for the clients
b. A tariff sheet specifying various charges, including brokerage, payable by the client, to avoid any dispute at a later date. List of documents which are voluntary/non-mandatory in nature.
c. Information on contact details of senior officials and Investor grievance cell of the Member, so that the client can approach them in case of any grievance.
2. The Non - Mandatory documents (any other document concerned with any term(s) or condition(s), other than those covered in the Mandatory documents) obtained from clients, shall be subject to the following conditions:
a. The clauses in the non-mandatory part shall not be in contravention of any of the clauses in the mandatory documents, as also the Rules, Regulations, Bye-laws, circulars of the Exchange, directives and guidelines of the Commission. Any such clause in contravention of the above shall be null and void.
b. Any authorization sought in non-mandatory part shall not be in contravention of the provisions of Rules, Byelaws (including Regulations), circulars of the Exchange and directives and guidelines of the Commission and Exchanges and has to be a separate document and shall require specific consent of the client.
c. Authorization sought in non-mandatory part shall always be subject to the following conditions:-
i. The authorization shall contain a clause that the client may revoke the authorization at any time.
ii. The authorization shall be in writing and be signed by the client only and not by any person authorized on his behalf.
iii. The authorizations so obtained are not for any inter family / group company / related accounts adjustment.
iv. The authorizations so obtained are not for any adjustment of funds among securities exchange and commodities exchange.
The members may please note that, the new set of documents under the Uniform Client Registration process would be applicable for all clients registering on or after April 01, 2012. Those clients who have registered prior to this date will continue to be governed as per the earlier procedure followed. If any client wishes to trade in an additional exchange on or after April 01, 2012, then the new uniform client registration form would have to be filled in by him.
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