SEBI is the market regulator.
New Delhi:
Capital markets regulator SEBI has barred stock brokers and clearing members from taking fresh bank guarantees on client funds from May 1. The Securities and Exchange Board of India (SEBI) said in a circular on Tuesday that stock brokers and clearing members have also been directed to withdraw all their existing bank guarantees by the end of September.
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SEBI said in the circular, “From May 1, 2023, stock brokers and clearing members will not be able to take any bank guarantee from customers’ money. All bank guarantees taken so far from customers’ funds will have to be covered by September 30, 2023.
Currently, stock brokers and clearing members pledge customers’ money with banks. Banks issue this amount as bank guarantee to clearing corporations for higher profits. In this process the money of the customers is exposed to market risks.
However, this provision will not apply to funds owned by stock brokers and clearing members.
(This news has not been edited by NDTV team. It is published directly from syndicate feed.)
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