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CS Professional · Strategic Management and Corporate Finance · Role of Intermediaries in Fund Raising

A stock broker registered with SEBI is acting for a client in the cash segment. Which of the following is a duty of the broker under the SEBI (Stock Brokers) Regulations code of conduct?

A stock broker must issue contract notes for executed trades and maintain proper client-wise records as part of the code of conduct. Guaranteeing returns, trading ahead of client orders and misusing client information are prohibited, so they are not duties.

  1. AIssue contract notes to clients for trades executed and maintain client-wise recordsCorrect
  2. BGuarantee a minimum return to the client on every trade
  3. CTrade against client orders for own benefit before executing the client's order
  4. DShare the client's unique client code freely with other brokers for marketing

Explanation

A broker must issue contract notes for trades and keep proper books and records, as part of its code of conduct. Guaranteeing returns, front-running client orders and misusing client information are prohibited practices. Hence only the first option is a duty.

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