To improve efficiency and protect clients’ securities, SEBI has announced that starting October 14, securities must be paid out directly to clients’ accounts. Currently, brokers receive the securities in their accounts before transferring them to clients.
After discussions with stock exchanges, clearing corporations, and depositories, SEBI decided that clearing corporations will now directly credit securities to clients’ demat accounts.
Clearing corporations must also set up a system for brokers to identify unpaid and funded securities under margin trading. If there are shortages due to netting positions between clients, brokers should handle them through auctions without charging clients extra fees.
This move follows SEBI’s efforts in May 2023 to ensure brokers properly handle and protect clients’ securities.
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