SEBI Framework to Voluntary Blocking of Trading Accounts

Evolution of Trading

Indian stock broking has shifted from call-and-trade to online platforms where investors can access their accounts using the login credentials provided by their broker.

SEBI proposed a framework on January 12th, 2024, wherein the investors' trading accounts will be voluntarily blocked upon the detection of any suspicious activity.

SEBI’s New Framework

Need to Freeze Account

While investors may notice any suspicious activity, many brokers lack a system to take immediate  action for account freeze/block. This creates a critical need for a mechanism similar to ATM and credit card blocking for enhanced security.

The Policy will Entail

Request Methods: Define clear channels for investors to communicate a block request to their broker. Acknowledgement: Ensure immediate confirmation receipt of the request to the investor.

1. 2.

The Policy will Entail

Processing Time: Establish a timeframe for processing the request and freezing/blocking the account. Broker Actions: Outline specific steps brokers must take upon receiving a freeze/block request.

3. 4.

New Framework will be Implemented From?

Brokers will develop and implement the framework by July 1st, 2024. Exchanges will monitor compliance and submit reports to SEBI.