Discontinuation of acceptance of cash by Stock Brokers
Summary
This circular directs stock brokers to discontinue the acceptance of cash from clients, either directly or via bank deposits. It modifies a 2003 SEBI circular to mandate payments through account payee cheques, demand drafts, or electronic fund transfers. Stock exchanges are instructed to amend their bye-laws and report on the implementation status.
Text
Stock Brokers shall not accept cash from their clients either directly or by way of cash deposit to the bank account of stock broker.
All payments shall be received / made by the stock brokers from / to the clients strictly by account payee crossed cheques / demand drafts or by way of direct credit into the bank account through electronic fund transfer, or any other mode permitted by the Reserve Bank of India.
The stock brokers shall accept cheques drawn only by the clients and also issue cheques in favour of the clients only, for their transactions.
make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above direction immediately
bring the provisions of this circular to the notice of their members and also disseminate the same on their websites
communicate to SEBI, the status of implementation of the provisions of this circular in their Monthly Report
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992
Source: SecMarx — Discontinuation of acceptance of cash by Stock Brokers. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.