Demat Account: SEBI's Proactive Move! Investors Can Now Block Demat Accounts Like Debit Cards

Demat Account: There is excellent news if you are a stock market investor. Stock market regulator SEBI has formulated a proposal to provide additional amenities to crores of investors in the country. Like with a debit card, you can stop your Demat account right once if there are any questionable actions.

SEBI's Circular Release

On this, SEBI has released a circular. All stock brokers have received instructions on this. Approximately 12.97 crore demat accounts exist in the nation as of right now. For credit and debit cards, the ability to ban transactions online is currently accessible. Clients can use their app or netbanking to block it. Investors will now have access to a similar facility on their demat accounts thanks to SEBI. In the event that a difference is discovered, clients can block their demat account online right away.

SEBI's Directive to Brokerage Firms

Brokerage firms have been requested by market regulator SEBI to develop a system that will enable investors to voluntarily suspend or terminate their trading accounts. Investors can currently choose to ban or freeze transactions in their demat accounts, but not in their trading accounts.

Market participants stated that despite the availability of the demat option, investors hardly ever use it because of a lack of knowledge. Under the "Ease of Investing by Investors" agenda, SEBI has taken this move. The majority of brokers do not now offer the ability to freeze or restrict accounts when investors notice suspicious actions.

SEBI's Clarity Requirement for Brokers

According to SEBI, brokers should have clear instructions on what to do in the event that they learn that an account has been blocked or frozen. Additionally, SEBI urges all brokers to let their clients know about this resource.

"There is an urgent need to solve the situation of facilitating trading account blocking, as it is equivalent to blocking ATM cards and credit cards," stated SEBI. "Investors have raised concerns about suspicious activity in their trading accounts on occasion. Stock exchanges would need to provide compliance reports to SEBI by August 31 regarding their facilities after the procedure begins on July 1.

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