Client Code Modification and Error Code Policy
- Punching error / typing error of client codes due to any genuine error or mistake in order entry, while punching the order, by any of dealer.
- Trade entered for wrong client due to any miscommunication from the client /authorized representative of the client.
- Selecting wrong scrip while placing order.
- Placing the order for a wrong quantity.
- Placing buy order instead of sale and vice versa.
- Institutional trades modified to broker error / pro account.
- If a wrong trade has been done intentionally.
- If the wrong trade is not reported within the time line.
- Surveillance / RMS / Compliance department has not recognised mistake.
- Trade not executed with responsibility.
- Without Cancel Limit order Executed.
- Repetitive mistakes.
- Technical glitches
The regulator and the exchanges view these dealing errors very seriously and have now imposed severe penalties in case such errors occur. In this regards the SEBI and Exchanges have issued the following circulars:
- SEBI/HO/CDMRD/DMP/CIR/P/2016/73 August 19, 2016
- SEBI/HO/CDMRD/ DMP/CIR/P/2016/43 March 29, 2016
- NSE/INVG/2011/18484 dated. July 29, 2011
- BSE/20110729-24 dated. Friday, July 29, 2011
- SEBI/CIR/DNPD/01/2011 Dated. Jan 03.2011
- SEBI/CIR/DNPD/6/2011 Dated. July 05, 2011
- NSE/INVG/2011/17029 Dated. February 17, 2011
- NSE/INVG/2011/18716 Dated: Aug 26. 2011
- NSCCL/SEC/2004/0464 Dated. May 31, 2004
Shifting of any trade (institutional or non – institutional) to the error account of the Broker shall not be treated as modification of client code under SEBI circular dated July 5, 2011, provided the positions arising out of trades in error account are subsequently liquidated / closed out in the market and not shifted to some other client code. With a view to minimize errors committed by the Dealers for each client code change, Management asks Dealers to write reasons for the same in Client code Error Sheet. Unless Management satisfied with the reason, no client code change to ERROR account is allowed. Daily monitoring of such client code changes are done by Management and Dealers are instructed to remain careful while executing the Trades. Dealers are required to take adequate precautions while placing the orders. All Staff members are advised to take note of the same and ensure necessary compliance.
A record for client code modification cases will be maintained on every financial year basis.
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