All demat accounts maintained by stock brokers need to be tagged by June-end: Sebi

NEW DELHI: Capital markets regulator Sebi on Monday mentioned all demat accounts of inventory brokers, that are untagged, must be appropriately tagged by June-end.
Credit score of securities won’t be allowed in any demat account left untagged from July 1 onwards.
Nevertheless, credit on account of company actions will probably be permitted, the Securities and Change Board of India (Sebi) mentioned in a round.
Tagging of financial institution and demat accounts replicate the aim for which these financial institution/demat accounts are being maintained and the reporting of such accounts to the inventory exchanges/depositories.
Sebi additional mentioned that debit of securities can even not be allowed in any demat account left untagged from August.
The inventory dealer must acquire permission from inventory exchanges to permit tagging of such demat accounts from August 1 onwards and in flip exchanges have to grant such approval inside two working days after imposing penalty as per their inside coverage.
“All demat accounts of inventory brokers that are untagged must be appropriately tagged by June 30, 2022,” Sebi mentioned.
The framework won’t be relevant for the demat accounts that are used solely for banking actions by inventory brokers that are additionally banks.
At current, inventory brokers are required to keep up demat accounts solely beneath 5 classes — proprietary account, pool account, shopper unpaid securities, shopper securities margin pledge account and shopper securities beneath margin funding account.
Beneath the foundations, naming proprietary demat accounts of the inventory dealer as ‘Inventory Dealer – Proprietary Account’ is voluntary and accounts which aren’t tagged can be deemed to be proprietary.