SEBI vide circular dated July 29, 2022 has issued a Framework for automated deactivation of trading and demat accounts in cases of submission of inadequate KYCs by trading members. Where SEBI instructs stock exchanges or depositories to serve any Show Cause Notice (“SCN”) or order issued by SEBI, they shall arrange to physically deliver the same to the trading.
The stock exchanges and depositories shall forward the signed acknowledgement of its receipt by the concerned addressee or its authorized representative to SEBI within a period of 30 working days from the date of receipt of such instructions from SEBI. If the stock exchanges and depositories are not able to deliver the SCN or order, as the case may be, at any of the addresses mentioned in the KYC records linked to any trading/ demat account of the entity; and obtain a signed acknowledgement of its receipt from the entity or its authorized representative, then they shall deactivate all such trading and demat accounts.
