MUMBAI: To minimise risks in the market, regulator Sebi has mandated that from Oct 14, investors will receive the stocks they bought directly to their demat accounts from clearing corporations.
Currently clearing corporations credit stocks to investors’ brokers who in turn credit those stocks to the respective investors. Sebi had found that at times brokers misuse such securities in pooled accounts for other obligations and hence the proposed new system that will eliminate the intervention of brokers for crediting stocks to buyers’ accounts.
“The securities for pay-out shall be credited directly to the respective client’s demat account by the (clearing corporation),” a circular from Sebi said.“Clearing corpora- tions shall provide a mechanism for trading members/ clearing members to identify the unpaid securities and funded stocks under the margin trading facility,” it said.
The circular also said that if buying of some stocks were funded by the investor’s broker, then the broker would hold those stocks by way of pledge. In case the investor fails to pay up on time for stocks bought on borrowed money, those could be auctioned.
