Investors to get direct payout of securities now
Sebi mandates direct transfer of securities to demat accounts by clearing corporations to protect clients' assets. A Balakrishnan from Geojit Financial Services praises the move for enhancing security, ease of margin trading, auto pledge for funded stocks, effective from October 14, improving the margin trading facility.
The and Exchange Board of India (Sebi) has mandated that should receive their securities directly to their from . The move is aimed to protect clients' securities and to ensure that the segregates securities of the clients so that they are not vulnerable to misuse.At present, the securities received in payout are pooled by the broker and then credited to the respective client demat accounts.
"In our current process, for all positions without dues we immediately transfer to beneficiary account of clients.The new process will be better, clearing corporation will directly crediting to the clients based on dues report submitted," said A Balakrishnan, executive director, .
"This will eliminate one leg and is a good move from the . Auto pledge for funded stocks will give ease of doing MTF () iterative steps will be reduced," Balakrishnan said.
The would come into effect from October 14. Earlier, to was done on a voluntary basis.
The regulator in the past had found that at times brokers misuse clients securities for their own purpose.
Sebi said clearing corporations should provide a mechanism for brokers to identify the unpaid securities and funded stocks under the margin trading facility.
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Source: Stocks-Markets-Economic Times
