SEBI for ban on buying, selling tips

March 31st, 2008 - 9:47 pm ICT by admin  

Mumbai, March 31 (IANS) In a move to guard insider trading, market regulator Securities Exchange Board of India (SEBI) Monday proposed to ban brokers from recommending shares to investors based on subjective and arbitrary information. “Trading members shall not recommend to their clients securities or derivative contracts on such securities in a concentrated manner, which represents a subjective or arbitrary supply of information,” said SEBI’s draft policy for improvement in sales practice by the members of stock exchanges.

The guidelines, on which SEBI has invited comments from public by April 15, added that investors would be required to have a minimum net worth of Rs.500,000 for trading in derivative segments.

Brokers, it said, “shall not have executive transactions for own account in securities ahead of making recommendations to their clients in such securities”.

Brokers would also be prohibited from executing contracts, which are “not explicitly authorised” by their clients.

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