 "Sebi mulling new framework to prevent misuse of client collateral")
Market regulator Sebi on Monday proposed a new framework for client collateral segregation and monitoring. The rules are aimed at identifying each client’s collateral and ensuring it is utilised towards the margins of that client only.
“In the past, there have been instances of misuse of client collateral. In such a scenario, not only confidence of investors in market integrity is shaken, but it also brings disrepute to the entire ecosystem of trading,” Sebi said in a discussion paper inviting public comments.
The new framework aims to tackle the issue of misappropriation and misuse of client funds by brokers and also to shield the clients in an event the broker defaults. Sebi has proposed a new reporting mechanism which will provide visibility of client-wise collateral at all level such as the trading member, clearing member and the clearing corporation.
“In the past, there have been instances of misuse of client collateral. In such a scenario, not only confidence of investors in market integrity is shaken, but it also brings disrepute to the entire ecosystem of trading,” Sebi said in a discussion paper inviting public comments.
The new framework aims to tackle the issue of misappropriation and misuse of client funds by brokers and also to shield the clients in an event the broker defaults. Sebi has proposed a new reporting mechanism which will provide visibility of client-wise collateral at all level such as the trading member, clearing member and the clearing corporation.
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%