Zerodha's Nithin Kamath hails SEBI's proposal of direct payout of securities to client accounts

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demat accounts. A facility of direct delivery to investors was introduced in February 2001. "It has been decided that the process of securities payout directly to the client account shall now be mandatory," said SEBI in its consultation paper.

The securities for payout should be credited directly to the respective client's demat account by the clearing corporations. Also Read: SEBI releases master circular for RTAs. Key points explained here Commenting on the same, Kamatha took to social media platform ‘X’ and said, ‘’Today, when a client buys stock, it gets credited to the broker pool account, and then the broker credits it to the customer.

In the new way proposed, the shares will get directly credited to the customer's demat.'' ‘’Even without this regulation, we're probably the safest financial market in terms of the security of customer assets, given that everything is in the customer's own demat. This regulation will further enhance that,'' said Kamath. Moreover, clearing corporations should provide a mechanism for Trading Member(TM)/clearing members (CM) to identify the unpaid securities and funded stocks under the margin trading facility.

Also Read: SEBI tells investment advisors to share details of all their social media handles every six months. Details here In case of any shortages "arising due to inter se netting of positions between clients" -- internal shortages -- SEBI suggested TM or CM should handle such shortages through the process of auction. Moreover, in such cases, the brokers should not levy any charges on the client over and above the charges levied by the clearing corporations.