Stocks directly in demat account? Nithin Kamath heaps praises on SEBI's latest proposal - What is it? EXPLAINED

stocks directly in demat account? nithin kamath heaps praises on sebi’s latest proposal – what is it? explained

Zerodha boss Nithin Kamath praised a new proposal by capital market regulator Securities and Exchange Board of India (SEBI), which has put forth the idea of payout of securities directly to client demat accounts. SEBI on Thursday issued a consultation paper in regard to the same.

“This consultation paper, if implemented, significantly simplifies the DP operations of stock brokers,” the Zerodha co-founder and CEO said in a post on X, formerly Twitter.

Stocks directly in demat account?

As per the market regulator’s proposal, the clearing corporation credits the pay-out of securities in the pool account of broker, who then credits the same to the respective client demat accounts currently. “Further, a facility of direct delivery to investor was introduced in February 1, 2001.”

The market regulator added that now, in a move to enhance operational efficiency and reduce the risk to clients’ securities, it has been deliberated to make the process of direct payout of securities to the client account mandatory.

Backing SEBI’s move, Zerodha boss Kamath said in the new way proposed, the shares will get directly credited to the customer’s demat. “Today, when a client buys stock, it gets credited to the broker pool account, and then the broker credits it to the customer.”

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, he added.