SEBI Mandates Direct Transfer Of Securities To Client Demat Accounts

SEBI mandates direct transfer of securities to clients' demat accounts by clearing corporations starting October 14, 2024. Previously voluntary since February 1, 2001, this move aims to enhance security and prevent misuse. Clearing corporations must establish mechanisms for identifying unpaid securities and funded stocks. \r

Brokers must open a separate demat account for funded stocks under margin trading. Procedures for handling shortages via auctions are outlined. SEBI prohibits brokers from imposing additional charges. Stock exchanges, depositories, and clearing corporations must disseminate circular provisions to members and amend relevant regulations. \r

Implementation standards will be developed by the Broker's Industry Standards Forum with SEBI consultation by August 5, 2024.