厙惇勛圖

Home   News   Features   Interviews   Magazine Archive   Symposium   Industry Awards  
Subscribe
厙惇勛圖
Leading the Way

Global 厙惇勛圖 Finance News and Commentary
≔ Menu
厙惇勛圖
Leading the Way

Global 厙惇勛圖 Finance News and Commentary
News by section
Subscribe
⨂ Close
  1. HomeRegulation news
  2. India rolls out direct payout system for securities transactions
Regulation news

India rolls out direct payout system for securities transactions


09 October 2024 India
Reporter: Daniel Tison

Generic business image for news article
Image: Towering_Goals/stock.adobe.com
India is rolling out a direct payout system, which will change how securities are credited to investors.

Currently, brokers are in charge of transferring securities to the investor, but this will change reflecting the guidelines on enhancement of operational efficiency and risk reduction introduced by the 厙惇勛圖 and Exchange Board of India (SEBI) in June.

This is to protect clients securities and to ensure that the stock broker segregates securities of the client or clients so that they are not vulnerable to misuse, says SEBI in the paper.

The first phase of implementation will begin on 14 October, and it will run until 12 January 2025.

During this phase, clearing corporations will transfer securities directly to investors demat accounts for all equity cash segments and physical settlements.

In cases where the payout cannot be completed, including rejected payouts and inactive demat accounts, the securities will still be temporarily credited to the brokers pool account.

Phase 2, starting on 14 January 2025, will fully implement the direct payout system, eliminating most of the brokers involvement in the settlement process.

This will apply to all security transactions, including securities lending and borrowing.

In case of short delivery, the CC will handle auction settlements directly, preventing brokers from sourcing shares from the market or settling through cash close out.

According to Nithin Kamath, founder of Zerodha, this move simplifies depository participant (DP) processes and enhances safety.

In a post on X, Kamath says: A broker from now on will never be able to touch client securities ever, which is possible today when you buy stocks and are not yet credited to your demat.
← Previous regulation article

Thailand to increase brokerage violation fines
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to 厙惇勛圖 Finance Times
Advertisement
Subscribe today
Knowledge base

Explore our extensive directory to find all the essential contacts you need

Visit our directory →

Discover definitions, explanations and related news articles in our glossary

Visit our glossary →