SEBI Proposes New Framework for Segregation, Monitoring of Collateral at Client Level
Moneylife Digital Team
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Amidst instances of misuse of client collateral by trading members, market regulator Securities and Exchange Board of India (SEBI) has issued a new proposed framework for segregation and monitoring of collateral at client level. The proposal comes in the wake of the Karvy Stock Broking crisis where clients' shares had been pledged illegally as collateral against loan.
The regulator has proposed to build a mechanism for reporting, dissemination and usage of information pertaining to collateral other than securities collateral received by way of pledge or re-pledge mechanism.