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Sebi tweaks framework for upstreaming of client funds by brokers
Markets regulator Sebi on Friday tweaked the framework pertaining to upstreaming of all client funds received by stock brokers and clearing members to clearing corporations.
The modifications have been made following representations received from various stakeholders, including Market Infrastructure Institutions (MIIs) and stock brokers, saying that changes to the systems are still under progress, and that there are certain practical difficulties in implementation of the proposed framework.
Under the framework which was issued earlier this month, no clients' funds would be retained by stock brokers on an End of Day (EoD) basis.
Further, clients' funds will be upstreamed by stock brokers and clearing members to clearing corporations only in the form of either cash, lien on Fixed Deposit Receipt (FDR) or pledge of units of mutual fund overnight schemes,
In a circular on Friday, Sebi said stock brokers/ clearing members (SBs/CMs) may receive funds from clients beyond the prescribed