Active Stocks
Wed May 22 2024 11:09:53
  1. Tata Steel share price
  2. 172.40 -1.09%
  1. Kotak Mahindra Bank share price
  2. 1,684.00 -0.77%
  1. NTPC share price
  2. 374.95 0.82%
  1. ITC share price
  2. 439.70 1.09%
  1. State Bank Of India share price
  2. 816.25 -1.72%
Business News/ Markets / Stock Markets/  Sebi to implement facility of ‘voluntary blocking’ of trading accounts by clients
BackBack

Sebi to implement facility of ‘voluntary blocking’ of trading accounts by clients

Sebi plans to offer the facility of voluntary freezing or blocking of trading accounts by clients to counter suspicious activities.

SEBI has planned to offer the facility of voluntary freezing or blocking of the ‘Trading Accounts’ by clients Premium
SEBI has planned to offer the facility of voluntary freezing or blocking of the ‘Trading Accounts’ by clients

Securities and Exchange Board of India (Sebi) has planned to offer the facility of voluntary freezing or blocking of the ‘Trading Accounts’ by clients as it is available in Demat accounts, ATMs, and Credit Cards.

In a circular on Friday, the stock market regulator said, “It has been observed that at times, suspicious activities are noticed by the investors but the facility of freezing/blocking of accounts is not available with the majority of trading members."

Sebi said that there is an urgent need to implement a facility for blocking/freezing trading accounts.

SAT says Sebi has four weeks to comply with Karvy order

The capital markets regulator said a framework will be put in place by April 1, allowing trading members to offer the facility of voluntarily blocking online access of trading accounts for clients displaying suspicious activities.

Brokers' Industry Standards Forum (ISF) will lay down the framework on this matter in collaboration with stock exchanges Sebi said.

Sebi panel bats for easier listing norms

It will prescribe communication methods for clients to request such blocking, the issuance of acknowledgment upon message receipt, and the timeframe for processing the request and blocking the trading account.

Further, Sebi said that action will be taken by the trading member following the receipt of a request for freezing/blocking of the trading account and the process for re-enabling the client for trading.

Sebi looking to bring finfluencers under regulatory ambit

The stock broking industry in India has moved from a call-and-trade type of scenario to online mode, wherein the investors use the login IDs and passwords provided to them by the trading members.

"To enhance ease of doing business and ease of investment, it has been decided that the framework for trading members to provide the facility of voluntary freezing/blocking the online access of the trading account to their clients on account of suspicious activities shall be laid down on or before April 1, 2024, by the ISF," Sebi said.

Sebi has only taken baby steps towards full-fledged short selling

In a separate circular, Sebi asked stock exchanges to put in place a mechanism for monitoring clients' funds lying with the stock brokers. This will be based on the principle that the total available funds -- cash and cash equivalent -- with the stock broker and with the clearing corporation/clearing member should always be equal to or greater than clients' funds as per the ledger balance.

This came after Sebi received representations from various stakeholders citing inefficiencies due to duplication of monitoring mechanisms and difficulties in uploading data to exchanges.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed - it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 13 Jan 2024, 12:33 PM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started