Updated Jun 8, 2024 | 03:17 PM IST
In prior post, Kamath talked about the consultation paper that aims to simplify the DP operations of stock brokers. He said “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.”
Nithin Kamath on Sebi’s latest amendments to make markets safe.
Zerodha co-founder Nithin Kamath praised Securities and Exchange Board of India (SEBI) for ‘making markets safer and more investor-friendly through several changes since 2019’. In his new X post, Kamath said: “It started with segregation of client funds, compulsory quarterly bank runs on brokers (quarterly settlement), removing pooling of funds for MF transactions, and more.”
Direct Payout of securities to investors
Kamath highlighted the latest regulation by Sebi that will direct payout of securities to investor demat accounts upon purchase. Today, when investor buy securities, Kamath adds, they’re credited by the clearing corporation to the stock broker’s pool account, who in turn transfers them to the clients. “With the introduction of new regulation, CCs will directly transfer securities to the client’s account, bypassing the broker’s pool. This also eases operations at a broker’s end.”
‘Wouldn’t be surprised if all brokers…’ – Zerodha’s Nithin Kamath on latest SEBI directive
Increase limit for Basic Services Demat Account
Considering the proposal of SEBI to increase the limit for a Basic Services Demat Account (BSDA) from the current Rs 4 lakh to Rs 10 lakh, Kamath commented that investor will pay 0 or reduced AMC on their demat accounts with holdings up to Rs 10 lakh.
“The reduction in the AMC is, in a way, a result of the gradual reduction in a broker’s role. In the not-so-distant future, I wouldn’t be surprised if all that the brokers will be doing is just processing orders,” Kamath added in the X post.
In prior post, Kamath talked about the consultation paper that aims to simplify the DP operations of stock brokers. He said “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.”
