On Jan. 12, IND SEBI wrote re ease of doing investments by investors.
IND SEBI issued circular to all recognized stock exchanges and all registered trading members through stock exchanges, with respect to ease of doing investments by investors, and the facility of voluntary freezing/blocking of trading accounts by clients.
Follows IND SEBI Jan. 2023 proposed creating block mechanism for trading, #160505.
Framework on Voluntary Freezing/Blocking
On many occasions, investors have raised issues re suspicious activities in their trading accounts; thus, there is an urgent need to address the situation of having a facility for blocking of trading accounts as it is available for blocking of ATM cards, credit cards.
Framework for trading members to provide facility of voluntary freezing/blocking the online access of trading accounts to clients on account of suspicious activities shall be laid down on or before Apr. 1, 2024 by the Brokers' Industry Standards Forum.
It shall include necessary guidelines, detailed policy for voluntary freezing/blocking.
In addition, action to be taken by trading member pursuant to receipt of request for freezing/blocking trading account; process for re-enabling client for trading/transfers.
Intimation to be provided by trading members to clients, re introduction of the facility.
Stock exchanges shall ensure that guidelines are implemented by trading members with effect from Jul. 1, 2024, with appropriate reporting requirements put in place.
Compliance report shall be submitted to SEBI by stock exchanges by Aug. 31, 2024.
Effectiveness
Framework shall be laid down on/before Apr. 1, 2024; guidelines re the same shall be implemented with effect from Jul. 1; compliance report shall be submitted by Aug. 31.
Apr. 2024 IND BSE, IND NSE
On Apr. 8, 2024, IND BSE, IND NSE issued circulars on the requirement for trading members to frame a policy to align with the framework that provides the facility of voluntary freezing/blocking online access of the trading account to their clients.
The policy shall be the part of the trading member’s risk management policy.
For new clients onboarded from Jul. 1, 2024, the policy will be part of account opening kit; for existing clients, trading members shall inform clients via emails by Jul. 1, 2024.
Details of reporting requirement will be communicated via a separate notice.
Regulators
IND BSE; IND NSE; IND SEBI
Entity Types
B/D; CNSM; Exch; IA
Reference
Cir NSE/INSP/61529, 24/2024, Nt 20240408-12, 4/8/2024; Cir SEBI/HO/MIRSD/POD-1/P/CIR/2024/4, 1/12/2024
