Sebi proposes easing rules on handling unpaid client securities framework

Sebi proposes changes to simplify rules on handling unpaid client securities, aiming to reduce operational complexity while maintaining safeguards for investors

The Securities and Exchange Board of India (Sebi) on Friday proposed changes to the framework governing the handling of clients’ unpaid securities by trading and clearing members.

 

At present, unpaid securities are required to be transferred to a separate client account or pledged in favour of brokers, with strict timelines for either release to clients upon payment or liquidation in case of default. These provisions were introduced earlier to prevent misuse of client assets and ensure segregation of securities.

 

The latest proposals aim to revisit these norms to make the system more efficient while maintaining safeguards for investors.

 

The changes are aimed at streamlining existing processes and reducing operational complexity in dealing with securities that remain unpaid after trades.

 

The move is part of a series of consultation papers issued by Sebi in recent months to simplify regulatory frameworks, eliminate redundancies, and improve compliance ease across market participants.