The National Stock Exchange (NSE) on May 20, 2026, issued clarification on Waiver requests with respect to Penalty on Modification of Client Codes (All Segments).
This circular consolidates and clarifies provisions from various Securities and Exchange Board of India and National Stock Exchange of India Limited circulars regarding penalty waivers for client code modification (CCM) and handling of trades moved to the error account.
It reiterates that penalty waivers for CCM are allowed only in cases of genuine errors, such as minor typing/punching mistakes where the original and modified client codes are similar. Similarity is strictly defined as:
Single character error in the client code, or
Interchange of two adjacent characters
Additionally, only one such waiver per quarter per Trading Member is permitted for a specific client code pair. For client names, similarity will be determined based on the Companies (Incorporation) Rules, 2014.
The Exchange has observed misuse where Trading Members seek waivers without verifying genuineness. Hence, stricter adherence is mandated to ensure only valid claims are submitted.
Regarding error account trades, it is clarified that:
Transfers to the error account will not be treated as CCM, provided trades are square off/liquidated in the market within 3 working days (including trade day).
Such trades must not be reassigned to any client code (original or new).
Failure to liquidate within the prescribed timeline will attract penalties.
The provisions apply uniformly to both institutional and non-institutional clients, reinforcing compliance discipline among Trading Members.
Overall, the circular strengthens controls to prevent misuse of CCM waivers and ensures timely liquidation of error account trades.
[Circular No: 25/2026]
