SEBI develops an online system for detecting misuse of clients’ securities by brokers

SEBI vide Press Release No. 05/2020 dated 13th February 2020 it is published that the SEBI has developed an in – house online system by which it would be able to prepare client level securities holding register of the brokers.

  • SEBI collects the details of the clients’ securities submitted in weekly report filed by brokers with the Exchanges and updates the same with trades conducted in the accounts of said clients using the data available with SEBI in Data Warehousing and Business Intelligence System (DWBIS) as well as data provided by Exchanges, Clearing Corporations and Depositories pertaining to auction trades, corporate actions, Security Lending Borrowing Mechanism (SLBM) transfers, off-market trades etc.,
  • The securities holding balance computed is matched with the actual clients’ securities holding in the Demat account and submission made by the broker for the next day.
  • Any mismatch in data is flagged as an alert for Exchanges.
  • Also, SEBI developed the in – house e capabilities to online track the movement of client securities collected by the broker as collateral and raise alerts with Exchanges if diversion of clients’ securities is noticed.
  • These reports are being generated by SEBI on a weekly basis and three such mismatch reports have already been forwarded to Exchanges for reconciliation with members.

This system is likely to timely detect the misuse of clients’ securities collected by brokers as collateral or received in pay-out of securities.

https://www.sebi.gov.in/media/press-releases/feb-2020/sebi-develops-an-online-system-for-detecting-misuse-of-clients-securities-by-brokers_45980.html

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