SEBI Postpones Direct Securities Payout Deadline Amid Industry Feedback

The Securities and Exchange Board of India (SEBI) has pushed the implementation deadline for direct securities payouts to clients' demat accounts to November 11, 2024. The decision, prompted by industry feedback, aims to ensure a seamless transition and enhance market efficiency by reducing the intermediary role of brokers.

In a bid to enhance the efficiency of securities transactions, the Securities and Exchange Board of India (SEBI) has postponed the implementation of direct securities payouts to clients' demat accounts until November 11, 2024. This decision follows feedback from the Brokers' Industry Standards Forum and market infrastructure institutions (MIIs).

The new system, part of SEBI's ongoing reforms, aimed to commence on October 14, 2024. It intends to enable investors to receive immediate credit for their trades in their demat accounts, cutting the role of brokers in the settlement process. Presently, after a trade, securities are first credited to a broker's account before reaching individual investors, a process SEBI aims to streamline.

Under the revised regulations, brokers will no longer handle securities directly; instead, should a client fall short on payment, a pledge will be recorded by the Clearing Corporation in the client's account until full payment is made. The changes, once implemented, will also adjust the settlement payout timing to 3:30 pm, later than the previous 1:30 pm.

(With inputs from agencies.)