SEBI Automates Securities Process for Investor Protection
The Securities and Exchange Board of India (SEBI) has automated the process for invoking and selling pledged securities. Aimed at investor protection, this move addresses previous operational issues faced by brokers, particularly in client-initiated sales, by enabling a seamless, automated process to prevent unnecessary accumulation and ensure transparency.
- Country:
- India
In a significant move aimed at enhancing investor protection and simplifying business operations, the Securities and Exchange Board of India (SEBI) on Tuesday announced a new automated process for the invocation and sale of pledged securities.
This decision addresses persistent challenges: brokers, after invoking pledged securities, often fail to sell them, leading to accumulation. Additionally, the manual intervention required during client-initiated sales, involving multiple unpledge and delivery steps, has frequently resulted in operational complexities.
Under the new framework, set to begin on September 5, SEBI will mandate brokers to automate these transactions. This includes a streamlined single instruction system in the case of client sales and a new 'invocation cum redemption' feature for mutual funds, promising improved transparency and auditability.
(With inputs from agencies.)
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