Sebi extends deadline to implement direct pay-out of securities to clients' demat a/c to Nov 11

Markets regulator Sebi on Thursday extended the deadline to implement guidelines mandating the direct pay-out of securities to clients’ demat accounts to November 11.

This rule was originally set to take effect on October 14.

On June 5, the Securities and Exchange Board of India (Sebi) came out with a circular requiring Clearing Corporations (CCs) to credit pay-out securities directly to the client’s demat account to improve operational efficiency and reduce risk.

Currently, the clearing corporation credits the pay-out of securities in the pool account of the broker, who then credits the same to the respective client’s demat accounts.

The final operational guidelines were to be issued by CCs to the market by August 5. However, the guidelines were issued by CCs at the end of August on account of extensive consultation in Brokers’ Industry Standards Forum (Brokers’ ISF).

After a review meeting and representations from the Brokers’ Forum, Sebi has extended the implementation date to November 11 to ensure a smooth transition without market disruptions, according to the circular issued on Thursday.

In a separate circular, the regulator announced a change in the timing of securities pay-out under the T+1 rolling settlement.

The pay-out time has been changed from 1:30 pm to 3:30 pm, ensuring that securities will be credited to clients’ accounts on the same day, rather than one day after the pay-out from the exchange.

For Phase 1, pay-out of securities in the equity cash segment (including netted cash and F&O physical settlement) will now be credited directly to clients’ demat accounts by CCs.