Sebi stiffens rule on unauthorised trades

Brokers hail the move but share concerns over increased time and cost of compliance

To curb 'unauthorised trades,' the Securities and Exchange Board of India (Sebi) has directed brokers to maintain evidence of clients placing orders with them.

Such trades are defined as buy or sell orders placed by a broker on behalf of a client without the latter's directive or authorisation. The markets regulator said the evidence may be a physical record from the client, a telephone recording, e-mail from a registered mail address, a log for internet transactions, record of mobile messages or any other "legally verifiable record".

"When a dispute arises, the burden of proof will be on the broker to