Starting February 1, stock brokers will be required to offer new trading options to their clients. They must provide either a UPI-based fund blocking system for trading in the secondary market, similar to the ASBA facility, or a convenient three-in-one trading account.
A three-in-one account combines a savings account, a demat account, and a trading account into one. This means clients can keep their money in a savings account and earn interest on it while they trade.
“This initiative will give investors better security, more transparency, and the ability to earn interest, making payments easier as UPI payments continue to grow,” said Rahul Jain, CFO of NTT DATA Payment Services India.
The UPI block mechanism allows clients to trade using funds that are blocked in their bank accounts, which protects their money from being misused. They can choose to either keep using the current method of transferring money to brokers or switch to the new system.
The Securities and Exchange Board of India (Sebi) has approved this plan, which will start on February 1, 2025. This new trading option will help clients manage their funds better and make transactions more convenient.
Currently, using the UPI fund blocking feature is optional for investors, but it is expected to become standard in the future.
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