Markets regulator Sebi has refused to extend the September 1 deadline to implement the new rules on margin pledge, stock brokers’ association Anmi said on Monday.
The new mechanism is aimed at bringing transparency and preventing brokerages from misusing clients’ securities.
The decision was taken after Sebi’s meeting with stock brokers’ association, depositories and clearing corporations. The meeting was held to analyse readiness to implement the new norms.
Sebi had come out with the norms in February and was scheduled to come into effect from June 1. It was extended to August 1 and thereafter to September 1.
According to sources, the regulator has refused to extend the September 1 deadline, as depositories are ready to implement the new mechanism.
However, Association of National Exchanges Members of India (Anmi), a grouping of around 900 stock brokers from across the country, on Friday urged Sebi to extend the implementation of the new mechanism on margin pledge by one month till September 30, citing several challenges faced by market participants.
Besides, back office vendors group has not given 100 per cent clearance to members to launch the new process, it had added.
“In today’s virtual meeting, Sebi’s declined to grant extension of further time in implementing margin pledge/repledge process. This mi and its 900 members. Anmi is holding consecutive meetings with all stakeholders and studying all options available to it in the matter,” a spokesperson of Anmi said.
The brokers association had requested for the co-existence of the current systems of title transfer, and the proposed pledge system till September 30.
However, Securities and Exchange Board of India (Sebi) in July had said that trading members (TMs) or clearing members (CMs) can accept client securities as collateral by way of title transfer into the client collateral account as per the present system till August-end.
The regulator had allowed co-existence of the current title transfer collateral mechanism and the new pledge and re-pledge process till August 31 and had said no further extension will be granted.