SEBI OKs mandatory ASBA-like offering or 3-in-1 account by qualified brokers
This story was originally published at 06:00 IST on 1 October 2024
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--SEBI OKs mandatory ASBA-like offering or 3-in-1 acct by qualified brokers
MUMBAI – The board of the Securities and Exchange Board of India Monday approved a proposal to make it mandatory for qualified stockbrokers to offer their secondary market clients either a facility of blocked amount trading or 3-in-1 trading accounts. This will be in addition to the current mode of trading offered by brokers. The brokers will be required to comply with this by Feb. 1.
Clients of qualified stockbrokers will retain the option to either continue with the existing facility of trading by transferring funds to their brokers, or opt for the blocked amount or 3-in-1 trading account facility. The blocked amount trading in the secondary market, which is similar to application supported by blocked amount facility in the primary market, is currently not mandatory for any stockbroker to offer as a service to clients. Similarly, the 3-in-1 trading account facility, where the investor's trading, demat, and bank accounts are linked, is currently offered by a few large brokerages only.
Similar to investor applications supported by blocked amount facility, popularly known as ASBA facility, in the primary market issuances, the blocked amount facility in the secondary market trading will apply only to payments made by clients to brokers through the Unified Payments Interface payment system.
There are currently 14 brokers who are shortlisted as qualified stockbrokers jointly by stock exchanges. These brokers are those where the exchanges are required to carry out higher monitoring and surveillance, and impose higher compliance requirements, as per the Securities and Exchange Board of India's circular. The stock exchanges classify brokers under the qualified stockbroker list based on their size and scale of operations, active client base, assets size of clients, end-of-day client margins, and broker's trading volume.
The current shortlist of qualified stockbrokers has Finvasia Securities, NJ India Invest, Rajvi Stock Broking, 5paisa Capital, Angel One, Globe Capital Market, HDFC Securities, ICICI Securities, IIFL Securities, Kotak Securities, Motilal Oswal Financial Services, NextBillion Technology, RKSV Securities India, and Zerodha Broking in it. End
Reported by Rajesh Gajra
Edited by Manisha Baxla
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