Market regulator Securities and Exchange Board of India (SEBI) has asked all stock brokers to name and tag bank and demat accounts to reflect the purpose for which those bank and demat accounts are being maintained by, 30 June 2022.
In a circular, SEBI says, "Credit of securities shall not be allowed in any demat account left untagged from 1 July 2022 onwards. Credits on account of corporate actions shall be permitted. Debit of securities shall also not be allowed in any demat account left untagged from 1 August 2022."
On 26 September 2016, the market regulator had mandated uniform nomenclature to be followed by stock brokers for naming and tagging of bank and demat accounts.
After 1 August 2022, stock brokers will have to obtain permission from stock exchanges and pay penalty to allow tagging of such demat accounts. "Stock exchange shall grant such approval within two working days after imposing penalty as per their internal policy."
SEBI also clarified that this circular will not be applicable for the demat accounts which are used exclusively for banking activities by stock brokers which are also banks.
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