SEBI noted that after the use of the opposite, the brokers often do not sell them, resulting in accumulation in broker accounts.
Moreover, when the clients sell the response .Cures of the securities, the brokers face operational problems, which require multiple steps such as unplanned and delivery, sometimes physical or digital instructions or POAs.
Sebi said in a circular that “for ease of doing business as well as protecting the interest of investors, it has been decided to request and sell as a joint automatic process.”
For sale started by the client, when the clients respond to the response .In the securities, the depositors will now allow a notification .It will allow to release and block securities for a direct pay-in direct pay-in from the client’s demat account. This process will eliminate the need to use manual instructions or power attorney faf attorney (POAs).
In the case of a broker-initiative request, when brokers demand securities due to non-payment, shares excluding unwanted mutual funds will be automatically blocked from the client’s demat account for the initial pay-in.
In addition, transparency and transactions trail will be maintained in the Broker’s response Accounts accounts to ensure transparency and Audit detailability.
For unlisted mutual funds, SEBI has introduced a new ‘Invocation Cum Redemption’ mechanism. This feature helps brokers to automatically request and relieve mutual fund units by facilitating their response Accounts accounts, operations and reducing delays.
In cases associated with stable or blocked client accounts, the requested securities will be transferred to the broker’s demat account. To prevent unnecessary accumulation, brokers need to sell these securities on the same day under their own code.
The structure will go into effect on September 5, when the depositors are required to issue a detailed operational guide by July 1.
Previously, Sebi had mandated the brokers to accept securities as collateral by the promise of margin in the depository system.
(Now you can subscribe to our Etmarkets WhatsApp channel)
