New Delhi: To facilitate ease of doing business and safeguard the investors’ interest, markets regulator Sebi on Tuesday decided to automate the process of invocation and sale of pledged securities.
This comes after Sebi noted that after invoking pledged securities, brokers often don’t sell them, resulting in accumulation in broker accounts.
Moreover, brokers face operational issues when clients sell pledged securities, requiring multiple steps like unpledge and delivery, sometimes using physical or digital instructions or POA.
“With a view to facilitate ease of doing business as well as to safeguard the interest of investors, it has been decided to make the invocation and sale as a combined automated process,” Sebi said in a circular.
For client-initiated sales, when clients sell pledged securities, depositories will now allow a single instruction to release the pledge and block the securities for early pay-in directly from the client’s demat account.
This process will eliminate the need for manual instructions or the use of Power of Attorney (POA).