The new trading rules altered by SEBI


Capital market regulator SEBI has come up with a new set of rules and regulations to prevent unlawful activities in the market. The watchdog is planning to implement the new set of rules between September and December in a Phased manner.

Last year the Karvy fiasco, a stock borking firm used the loophole in the stock market system to use the investor’s money for the company’s benefit. After this issue, the capital market regulator comes up with a set of rules to plunge the loopholes and to strengthen the regulatory framework. The new regulations are majorly focusing on the equity market and derivatives markets. SEBI has made the regulations more investor-friendly and it will ensure transparency in trading. B. Gopakumar CEO of  Axis bank securities said that “the new mechanism gives more power to investors and brings more transparency in the broking ecosystem”.

Newly introduced rules and regulations will certainly benefit investors. The major changes recommended by SEBI are as follows;

Delivery of shares:  Trading is largely unaffected in this case. At the time of placing the trade, the bank-owned brokers block the margin money or stocks from the linked bank account. If it a buy transaction, the brokers block the entire money due at the time of placing the trade. In case of a sale transaction, the stocks are blocked by the broker. According to the current regulation, brokers debit the blocked funds at the time of trading. It can be either 20% of the trade amount or the entire sum.

Intraday trading:  Nowtheinvestors cannot use the intraday profit for further trading on the same day. It will be reflected in T+2 days. It will increase the amount of margin money for an investor who needs the bulk of intraday trades

Pledge of shares: If an investor pledges the shares for the margin requirement, it will not move from the Demat account of the investor. But a lien will be created for the broker. Earlier the broker used the power of attorney to transfer the pledged shares to the investor’s Demat account.


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