SEBI on June 30, 2023 has issued clarification regarding Implementation of circular on upstreaming of clients’ funds by Stock Brokers (SBs) / Clearing Members (CMs) to Clearing Corporations (CCs). As per the framework, no clients’ funds shall be retained by SBs/ CMs on End of Day (EoD) basis. The clients’ funds shall all be upstreamed by SB/ CMs to CCs only in the form of either cash, lien on FDR (subject to certain conditions enumerated below), or pledge of units of Mutual Fund Overnight Schemes (MFOS).
Representations have been received from various stakeholders viz. MIIs, stock brokers, and associations that the changes to the systems are still under progress, and that there are certain practical difficulties in implementation of the proposal framework.
Therefore it is clarified that SBs/CMs may receive funds from clients beyond the prescribed cutoff time for upstreaming subject to the condition that there shall not be any further movement of funds from that account (i.e., a debit freeze) till the opening of upstreaming window on the next day.