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Market regulator SEBI has decided to make the process of direct payment of securities into the account mandatory. This step has been taken to increase operational efficiency and reduce the risk of securities of customers. The Securities and Exchange Board of India (SEBI) said in a circular that this will be effective from October 14.
New Delhi. Market regulator Sebi on Wednesday decided to make the process of direct payment of securities into the account of clients mandatory. This step has been taken to increase operational efficiency and reduce the risk of securities of clients. The Securities and Exchange Board of India (Sebi) said in a circular that this will be effective from October 14. Currently, the clearing corporation credits the payment of securities to the broker’s account.
It is then credited to the demat accounts of the respective client. “The securities for payment shall be credited by the clearing corporation directly into the demat accounts of the respective client,” Sebi has decided after extensive consultations with the stock exchanges, clearing corporations and depositories. Further, clearing corporations should provide a mechanism for the trading member or clearing members (CMs) to identify the securities not paid and the shares financed under the margin trading facility.
SEBI has suggested that if there is any shortfall at the ‘position’ level, then the trading member or the clearing member should settle it through the auction process. Moreover, in such cases, the broker should not charge any fee to the client other than the fee levied by the clearing corporation.
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