1. 1. I had opened a share trading account in equity segment and registered in equity segment in KYC and accordingly signed the Risk disclosure and Member Client Agreement (MCA) in context of equity segment only.
As per SEBI Procedure for registering a client is by signing Mandatory documents KYC, MCA, RDD and these shall be executed in the format as prescribe by SEBI. Client should indicate the Market segment in the KYC Form in his own hand and Sign against these.
I had no intentions to trade in derivative segment and hence never signed any of the Mandatory document ie KYC, MCA, RDD for Registering for derivative segment and as per SEBI circular these are the only Authentic mandatory documents for Registration and choosing the Market segment in the KYC Form and has to be filled in his own hand and Sign against these.
2. 2. However, Broker has forged and produced document “Disclosure for derivative / financial” which is just a one page document that states that …..
With reference to SEBI Circular MIRSD/SE Cir-19/2009 dated 3 Dec 2009, please find my/our request for updation of the requisite details in your records/ availing the facilities mentioned below. This is to be read in continuation to KYC and Agreement submitted by Me at the time of opening my Trading Account.
3. 3. Mandatory Documents are not signed for registering in Derivative/ Futures and Options (F&O) Segment. :
a) Know your Client (KYC): In order to register for F&O segment, Client shall indicate the stock exchange as well as the market segment where he intends his trades to be executed in the KYC form in his own hand and sign against these. Signing KYC in true sprit.
b) Risk Disclosure Document (RDD): Signing RDD is mandatory even otherwise to understand the risk associated with F&O. Moreover, An Investor can in no circumstance be deprived of having given a fair opportunity to read, understand and acknowledge the risk involved in the derivative segment by signing the Risk disclosure Document (RDD), for F&O Segment.
c) Member Client Agreement (MCA): After understanding the risks associated in Derivative Trading only I could have signed Member Client Agreement. No Agreement has been signed with Member for trading in Derivatives (Mandatory Document) how can I be victimised for the unauthorized trading done in the account.
4. 4. This document hijacks the principle of the right of investor to go through the Risks involved in F&O by not allowing to sign in the Risk Disclosure Document and there is no agreement between Client and member to trade in F&O. In the principal to natural Justice Signing Combined Risk Disclosure Document, Member Client Agreement earlier for approval in context of understanding the risks involved in cash segment on 20/03/10 cannot be made to understand for also being an approval for understanding the risks involved in derivative segment.
Question of LAW to be addressed & Case reference & Judgments required
1. Can merely by stating ………..This is to be read in continuation to KYC and Agreement……. will a client be not allowed to Read and understand risks associated with derivative segment hich otherwise is mandatory document as per SEBI.
2. Can merely a one page letter be sufficient by stating ……This is to be read in continuation to KYC and Agreement and will a client be not allowed to Read and understand the terms of Agreement and by taking sign of only one party (client) and not the broker, Can this document be called the agreement and will it be valid and binding on client?
