SEBI, vide its Circular dated 20th June, 2022 said that all demat accounts maintained by stock brokers should be appropriately tagged by 30th June, 2022. SEBI, further prescribed that :
- Credit of securities will not be allowed in any demat account left untagged from 1st July, 2022 onwards. However, SEBI said that credit on corporate actions shall be permitted.
- Debit of securities shall also not be allowed in any demat account left untagged from 1st August, 2022.
- Stock Broker shall obtain permission from Stock Exchanges to allow tagging of such demat accounts from 1st August, 2022 onwards. Stock Exchange shall grant such approval within two working days after imposing penalty as per their internal policy.
- SEBI, further added that, Circular shall not be applicable for the demat accounts which are used exclusively for banking activities by stock brokers which are also banks.
Currently stock brokers are required to maintain demat accounts only under the following 5 categories:
| Sr. No. | Demat Account Category | Purpose of Demat Account |
| 1. | Proprietary Account | Hold Own Securities |
| 2. | Pool account | Settlement Purpose |
| 3. | Client Unpaid Securities Account | Hold Unpaid Securities of Clients |
| 4. | Client Securities Margin Pledge Account | For Margin obligations to be given by way of Pledge/ Re-pledge |
| 5. | Client Securities under Margin Funding Account | Hold funded securities in respect of margin funding |
Further, it is to be noted that naming proprietary demat accounts of the stock broker as ‘Stock Broker –Proprietary Account’ is voluntary and accounts which are not tagged would be deemed to be proprietary.
Stock Exchanges and Depositories shall coordinate and ensure compliance of this circular by the stock brokers and submit a compliance report to SEBI on 1st July, 2022 and 1st August, 2022.
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