SEBI Proposes Mandatory ASBA-Like Trading Facility For Qualified Stock Brokers Leveraging UPI Block Mechanism In Secondary Markets

The Securities and Exchange Board of India (SEBI) has proposed a new mandatory facility akin to the Application Supported by Blocked Amount (ASBA) mechanism for qualified stock brokers. This system would leverage the Unified Payments Interface (UPI) to block funds during trading in secondary markets, enhancing security and ensuring that funds are available when trades are executed. The initiative aims to improve efficiency and reduce risks in the stock market by ensuring that brokers have the necessary funds on hand, thereby preventing defaults and promoting investor confidence. This proposal is part of SEBI’s broader efforts to modernize and safeguard the financial markets.