P&H HC: Eyewitness Account Not Credible if Eyewitness Directly Identifies Accused in Court  ||  Delhi HC: Conditions u/s 45 PMLA Have to Give Way to Article 21 When Accused Incarcerated for Long  ||  Delhi High Court: Delhi Police to Add Grounds of Arrest in Arrest Memo  ||  Kerala High Court: Giving Seniority on the Basis of Rules is a Policy Decision  ||  Del. HC: Where Arbitrator has Taken Plausible View, Court Cannot Interfere u/s 34 of A&C Act  ||  Ker. HC: No Question of Estoppel Against Party Where Error is Committed by Court Itself  ||  Supreme Court: Revenue Entries are Admissible as Evidence of Possession  ||  SC: Mere Breakup of Relationship Between Consenting Couple Can’t Result in Criminal Proceedings  ||  SC: Bar u/s 195 CrPC Not Attracted Where Proceedings Initiated Pursuant to Judicial Order  ||  NTF Gives Comprehensive Suggestions on Enhancing Better Working Conditions of Medical Professions    

SEBI issues stricter norms to prevent client securities misuse - (25 Feb 2020)

Capital Market

In order to prevent the misuse of client’s securities by broker, the Security and Exchange Board of India (SEBI) has issued a circular tightening the norms. The misappropriation or misuse includes use of one client's securities to meet the exposure, margin or settlement obligations of another client or of the Trading Members (TM) or Clearing Member (CM). The Regulations will come in effect from 1st June, 2020. The Circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Section 12 of the Depositories Act, 1996 read with Regulation 79 of the SEBI (Depositories and Participants) Regulations, 2018 and the relevant Bye Laws of the Depositories clearly enumerate the manner of creating pledge of the dematerialised securities. Any procedure followed other than as specified under the aforesaid provisions of law for creating pledge of the dematerialised securities is prohibited. It is clarified that, an off-market transfer of securities leads to change in ownership and shall not be treated as pledge. Transfer of securities to the demat account of the TM / CM for margin purposes (i.e. title transfer collateral arrangements) shall be prohibited. In case, a client has given a power of attorney in favour of a TM / CM, such holding of power of attorney shall not be considered as equivalent to the collection of margin by the TM / CM in respect of securities held in the demat account of the client.

With effect from June 01, 2020, TM (Trading Member) / CM (Clearing Member) shall accept collateral from clients in the form of securities, only by way of ''margin pledge'', created in the depository system in accordance with relevant provisions. TM / CM are prohibited from holding any client securities in any beneficial owner accounts of TM/CM, other than specifically tagged accounts. To devise a framework that mitigates the risk of misappropriation, SEBI had extensive consultations with Stock Exchanges, Clearing Corporation and Depositories and industry representatives of TM, CM and Depository Participants (the "DP")

Tags : CLIENT SECURITIES   MISUSE   NORMS  

Share :        

Disclaimer | Copyright 2024 - All Rights Reserved