SEBI Delays Direct Securities Payouts Implementation to November 11 for Seamless Transition

The Securities and Exchange Board of India (SEBI) extends the deadline for implementing direct securities payouts to investors' demat accounts to November 11, 2024. This move aims to ensure smooth implementation and minimal market disruption, following feedback from the Brokers' Industry Standards Forum and coordination with the National Stock Exchange (NSE).

The Securities and Exchange Board of India (SEBI) has announced a new implementation date for the direct securities payouts to investors' demat accounts, pushing it to November 11, 2024. This delay aims to facilitate a seamless transition and minimize potential market disturbances, according to feedback gathered from the Brokers' Industry Standards Forum.

Originally scheduled for October 14, the revised date follows a SEBI review meeting with Market Infrastructure Institutions (MIIs), responding directly to representation from the Brokers' ISF. The new plan aligns with National Stock Exchange Ltd's (NSE) announcement of its go-live date for the direct payouts as part of the T+1 rolling settlement system.

The change in regulations intends to streamline the securities settlement process by allowing direct credit to investors' demat accounts, thus limiting stockbrokers' intermediary roles. Under the current system, securities are initially credited to the broker's pool account before being transferred to the investor. SEBI anticipates enhanced operational efficiency and risk reduction under this new arrangement.

Per SEBI's instructions, brokers will no longer manage securities pledges associated with underpaid or margin-funded securities. Instead, if full payment is not received, the Clearing Corporation will record the pledge on the client's behalf, releasing it once the securities are fully paid. Additionally, the settlement payout timing will adjust to 3:30 pm, enhancing efficiency compared to the previous 1:30 pm timeline post-trade.

(With inputs from agencies.)