CIRCULAR
SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/180 November 13, 2023
To,
Stock Brokers through recognized Stock Exchanges
Dear Sir/Madam,
Subject: Most Important Terms and Conditions (MITC)
1. SEBI has prescribed the following uniform documents for formalizing the broker-
client relationship, as per clause 20 of “Master Circular on stock brokers” dated
May 17, 2023:
i. Account opening form
ii. Rights and obligations
iii. Risk disclosure documents
iv. Guidance note
v. Policies and procedures
vi. Tariff sheet
A copy of these documents is required to be provided by the broker to the clients
free of charge.
2. Typically, these documents are voluminous and investors may lose focus on
critical aspects of the relationship with the broker.
3. In order to bring into focus the critical aspects of the broker-client relationship and
for ease of understanding of the clients, it has been decided that brokers shall
inform a standard Most Important Terms and Conditions (MITC) which shall be
acknowledged by the client.
4. The form, nature of communication, documentation and detailed standards for
implementation of MITC shall be published on or before January 01, 2024, by the
Brokers’ Industry Standards Forum (ISF), under the aegis of stock exchanges, in
consultation with SEBI.
5. In the event that the ISF is unable to publish the same, as above, in whole or in
part, then SEBI, may, at its discretion, publish standards in respect of the same.
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6. In view of the above, additional clause 20.1.6 may be incorporated in the master
circular and 20.4 of the master circular stands amended as under.
“20.1.6. Most Important Terms and Conditions”
“20.4 ....in the future. The client would also be required to give acknowledgement
of Most Important Terms and Conditions (MITC)”
7. For onboarding of new clients, the date of the implementation and compliance by
the market participants shall be April 01, 2024.
8. For existing clients, the MITC shall be informed to clients via email or any other
suitable mode of communication (which can be preserved) by June 01, 2024.
9. The stock exchanges are directed to:
a. bring the provisions of this circular to the notice of stock brokers, 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 provisions;
c. publish the implementation standards on their websites; and
d. communicate to SEBI, the status of the implementation of the provisions of
this circular in their monthly development report.
10. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992 read with Regulation 30 of SEBI
(Stock Brokers) Regulations, 1992 and Regulation 51 of Securities Contracts
(Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, to
protect the interests of investors in securities and to promote the development of,
and to regulate the securities markets.
Yours faithfully,
Aradhana Verma
General Manager
Tel.No: 022 26449633
aradhanad@sebi.gov.in
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