Sebi plans to allow voluntary freezing of clients’ trading account from July 1

Jan 12, 2024

Synopsis
Currently, voluntary blocking/freezing of demat accounts is already available for investors, and this facility is now proposed to be offered for their trading accounts also, Sebi said.

The Securities and Exchange Board of India (Sebi) on Friday proposed a framework that allows voluntary freezing of clients’ trading accounts, that will help address issues of any suspicious activities.

Investors raise issues of suspicious activities in their trading accounts and thus, there is an urgent need to address the situation of having a facility for blocking of trading accounts, the regulator said.

Currently, voluntary blocking/freezing of demat accounts is already available for investors, and this facility is now proposed to be offered for their trading accounts also, Sebi said.

“It has been decided that the framework for trading members to provide the facility of voluntary freezing/blocking the online access of the trading account to their clients on account of suspicious activities shall be laid down on or before April 01, 2024,” the regulator said in a circular.

The framework will mention the detailed process of voluntarily freezing the online access to the trading account, the modes through which a client can raise a request to the trading member for blocking the trade account, the time period within which the request will be processed, and so on.

SEBI has directed stock exchanges to ensure that the guidelines issued under the framework are implemented by trading members from July 1, 2024.

Further, exchanges need to submit a compliance report to this effect to SEBI by August 31.

[The Economic Times]