INTERVIEW QUESTIONS INVESTMENT FUTURES AND OPTIONS TRADING DETAILS

Question: What are the important conditions laid by SEBI for a Derivative Member?

Answer: The derivatives member is required to adhere to the code of conduct specified under the SEBI Broker Sub-Broker regulations. The following conditions stipulations have been laid by SEBI on the regulation of sales practices:

1.Sales Personnel: The derivatives exchange recognizes the persons recommended by the Trading Member and only such persons are authorized to act as sales personnel of the TM. These persons who represent the TM are known as Authorized Persons.

2.Know-your-client:The member is required to get the Know-your-client form filled by every client.

3.Risk disclosure document: The derivatives member must educate his client on the risks of derivatives by providing a copy of the Risk disclosure document to the client.

4.Member-client agreement: The Member is also required to enter into the Member-client agreement with all his clients.

The derivatives member is required to adhere to the code of conduct specified under the SEBI Broker Sub-Broker regulations. The following conditions stipulations have been laid by SEBI on the regulation of sales practices:

1.Sales Personnel: The derivatives exchange recognizes the persons recommended by the Trading Member and only such persons are authorized to act as sales personnel of the TM. These persons who represent the TM are known as Authorized Persons.

2.Know-your-client:The member is required to get the Know-your-client form filled by every client.

3.Risk disclosure document: The derivatives member must educate his client on the risks of derivatives by providing a copy of the Risk disclosure document to the client.

4.Member-client agreement: The Member is also required to enter into the Member-client agreement with all his clients. Source: CoolInterview.com

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