SEBI proposes to check misuse of pool account

The Securities and Exchange Board of India (SEBI) has proposed a new system to check the misuse of the pool account by brokers. The new proposal attempts to ensure that the settlement is made directly to the investors. A pool account is a demat account which serves as a central account for brokers to facilitate purchases and sales of clients. It has been alleged that brokers have been misusing this facility depriving clients of certain benefits.

SEBI has clarified that corporate actions such as dividend payment and issue of bonus shares in respect of balances in the pool account, which remain outstanding on the record date, must be credited to the pool account of the clearing member, and the latter must credit the amount to a separate client account. This would enable the clients to receive the corporate benefits. However, investors should insist and ensure that the shares bought by them are received into their account well in advance of the record dates.

In another investor-friendly move, SEBI has extended the time frame given to investors for exercising the option of dematerialisation (demat) of shares sent for transfer to 30 days from the existing 15 days. The investor intending to exercise the option of dematerialising shares will be required to send the dematerialisation request within 30 days of the date of the option letter. -- BL Research Bureau