SMS and E-Mail Alerts by Stock Exchanges

Securities and Exchange Board of India
CIRCULAR
CIR/MIRSD/15/2011                                              August 02, 2011
To
All Recognized Stock Exchanges

Dear Sir/Madam, 

Sub: SMS and E-mail alerts to investors by stock exchanges
 
1. SEBI receives complaints from investors against stock brokers which include
alleged unauthorized trading in their accounts. SEBI has taken steps in the past
to address this issue.
2. As an additional measure, it has now been decided in consultation with the
major stock exchanges and market participants that the stock exchanges shall
send details of the transactions to the investors, by the end of trading day,
through SMS and E-mail alerts.  This would be subject to the following
guidelines:
A. Applicability
These guidelines are applicable to equity - cash and derivative - segments
of the stock exchanges.
B. Uploading of mobile number and E-mail address by stock brokers
i. Stock exchanges shall provide a platform to stock brokers to upload the
details of their clients, preferably, in sync with the UCC updation module.
ii. Stock brokers shall upload the details of clients, such as, name, mobile
number, address for correspondence and E-mail address.
iii. Stock brokers shall ensure that the mobile numbers/E-mail addresses of
their employees/sub-brokers/remisiers/authorized persons are not
uploaded on behalf of clients.
iv. Stock Brokers shall ensure that separate mobile number/E-mail address
is uploaded for each client. However, under exceptional circumstances,
the stock broker may, at the specific written request of a client, upload the
same mobile number/E-mail 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. Page 2 of 3
C. Verification by the stock exchanges
After uploading of details by the stock brokers, the stock exchanges shall
take necessary steps to verify the details by any mode as considered
appropriate by them which may include the following:
a. By way of sending SMS and E-mail directly to the investors at the
numbers/E-mail address uploaded by the stock brokers.
b. By way of sending letters to the address of the investors uploaded by the
stock brokers.
D. Sending of alerts by the stock exchanges
Upon receipt of confirmation from the investors, the stock exchanges shall
commence sending the transaction details generated based on investors’
Permanent Account Number, directly to them.
E. Handling of discrepancies, if any.
If any discrepancy is observed by the stock exchanges in the details
uploaded by the stock brokers including non-confirmation by investors,
bounced E-mails, undelivered SMS/letters, etc., the stock exchanges shall
inform the respective stock broker.
F. Meeting out the expenses for providing SMS and E-mail alerts
The stock exchanges may use the amount set aside from the listing fees for
providing services to the investing public, as provided vide SEBI
communication dated SE/10118 dated October 12, 1992, to meet the
expenses for providing this facility.
G. Implementation
The stock exchanges shall put in place necessary infrastructure and
implement the SMS and E-mail alert facility at the earliest and not later than
four months from the date of this circular.
3. Stock exchanges are advised to :
a. issue necessary instructions to bring the provisions of this Circular to the
notice of their constituents  and also disseminate the same on their
websites;
b. make amendments to the relevant bye-laws, rules and regulations for the
implementation of the above, as deemed necessary, in coordination with
other stock exchanges;
c. communicate to SEBI, the status of the implementation of the provisions
of this Circular in the Monthly Development Report to SEBI;
d. develop the monitoring mechanism through the system of half-yearly
internal audit and inspections; and
e. publicize widely the availability of this facility for the awareness of the
investors.    Page 3 of 3
4. This Circular is issued in exercise of powers conferred under Section 11 (1) of
the Securities and Exchange Board of India Act, 1992 to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market and shall come into effect from the date of this Circular.
 
5. This circular is available on SEBI website at  www.sebi.gov.in under the
categories “Legal Framework” and “Circulars”.
Yours faithfully,
V S Sundaresan
 Chief General Manager
022-26449200
sundaresanvs@sebi.gov.in