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Sebi tweaks rule on upstreaming clients’ funds by brokers to clearing corps
To promote ease of doing business, capital markets regulator Sebi on Tuesday tweaked the framework requiring stock brokers or clearing members to upstream clients' funds to clearing corporations.
This came after Sebi received representations from various stakeholders -- stock brokers, and brokers' associations citing certain operational difficulties in implementation of the framework.
Addressing the issue, Sebi said that stock brokers (SBs) or clearing members (CMs) will upstream all the clients' clear credit balances to clearing corporations (CCs) on the End of Day (EOD) basis. Such upstreaming will be done only in the form of either cash, lien on Fixed Deposit Receipts (FDRs) created out of clients' funds, or pledge of units of Mutual Fund Overnight Schemes (MFOS) created out of clients' funds.
Stock brokers are required to maintain designated client bank account to receive funds from their clients. The nomenclature of all such accounts will be changed to either of the two ...