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Stock Brokers’ Demat Accounts To Be Tagged By June 30: SEBI

SEBI has requested inventory brokers to tag their demat accounts by June-end

New Delhi:

Capital markets regulator Securities and Exchange Board of India (SEBI) on Monday stated all demat accounts of inventory brokers, that are untagged, have to be appropriately tagged by June-end.

Credit of securities won’t be allowed in any demat account left untagged from July 1 onwards. However, credit on account of company actions can be permitted, SEBI stated in a round.

Tagging of financial institution and demat accounts mirror the aim for which these financial institution or demat accounts are being maintained and the reporting of such accounts to the inventory exchanges and depositories.

SEBI additional stated that debit of securities can even not be allowed in any demat account left untagged from August.

The inventory dealer must receive permission from inventory exchanges to permit tagging of such demat accounts from August 1 onwards and in flip exchanges must grant such approval inside two working days after imposing penalty as per their inner coverage.

“All demat accounts of stock brokers which are untagged need to be appropriately tagged by June 30, 2022,” SEBI stated.

The framework won’t be relevant for the demat accounts that are used completely for banking actions by inventory brokers that are additionally banks.

At current, inventory brokers are required to keep up demat accounts solely underneath 5 classes – proprietary account, pool account, shopper unpaid securities, shopper securities margin pledge account and shopper securities underneath margin funding account.

Under the foundations, naming proprietary demat accounts of the inventory dealer as ‘Stock Broker – Proprietary Account’ is voluntary and accounts which aren’t tagged can be deemed to be proprietary. 

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