The Securities and Exchange Board of India (SEBI) has mandated that Qualified Stock Brokers (QSBs) must offer the facility of Trading Supported by Blocked Amount (TSBA) for secondary market trading. This facility can be provided either through the UPI block mechanism or via a 3-in-1 trading account facility. This new rule, effective from February 1, 2025, allows investors to block funds directly in their bank accounts instead of transferring them to Trading Members (TMs), thereby safeguarding their cash collateral.
The 3-in-1 trading account will integrate the trading, demat, and bank accounts of the client. It includes features such as blocking funds upon buy orders and securities upon sell orders, with pay-ins executed post-market hours, allowing clients to earn interest on funds until then. Clients of QSBs can choose to stick with the current system or opt for one of the new TSBA options.
This change is aimed at providing enhanced security for investors by minimizing fund transfer risks and aligns with SEBI’s commitment to investor protection and regulatory advancement in the securities market.
