Sebi Mandates Direct Payout to Clients' Accounts from October 14

Sebi has mandated the direct payout of securities to clients' demat accounts effective from October 14. This measure aims to enhance operational efficiency and safeguard clients' assets. The clearing corporations will handle the direct transfer, eliminating the brokerage middle step, and ensure stock segregation to prevent misuse.

In a bid to streamline operations and minimize risks to client securities, the Securities and Exchange Board of India (Sebi) announced on Wednesday that the direct payout of securities to client accounts will become mandatory starting October 14.

Currently, the clearing corporation channels these pay-outs through brokers, who then credit the clients' demat accounts. The new directive simplifies this by crediting securities directly to clients' demat accounts. This move follows comprehensive discussions between Sebi, stock exchanges, clearing corporations, and depositories.

Sebi has laid out additional measures for clearing corporations to identify and manage unpaid and funded securities under the margin trading facility. To address any internal shortages due to netting of positions, Sebi suggests handling such cases through auctions without imposing additional charges over those by clearing corporations.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)