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Taped Records Required For Stockbroker Orders

Apr 28,2001
Beginning in August, stockbrokers will have to tape-record the verbal transaction orders made by their clients and keep the recordings for one year, the Financial Supervisory Commission said Friday.

The financial watchdog revised regulations on the operation of securities companies in order to prevent employees at brokerage houses from buying or selling shares with customers' money without their approval. The recording requirements now only apply to options trading.

Clients who question transactions done with their money can demand information from their stockbrokers and get it within six business days after the request, according to the revisions. Information required to be disclosed would include the recording of their conversation with brokers, details about their trading accounts and analyst reports. Customers will be able to file for damages claims against the brokerage firms that violate the new rule.

To curb stock manipulation, the revisions will ban securities firms from trading a stock within four hours after recommending it to investors, or from trading a share after its clients placed big buy or sell orders on the issue. "Securities firms must be stopped from abusing their power over clients," said a commission official.



by Huh Kwi-shik




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