Two weeks after the Securities and Exchange Board of India (Sebi) has banned Karvy Stock Broking from taking new clients and executing trades, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) have suspended the licence of the broker on Monday, citing non-compliance of the regulatory provisions of the exchanges.
The action followed leading bourse NSE forwarding a preliminary report to Sebi on the non-compliance observed with respect to the pledging/misuse of client securities by Karvy Stock Broking.
Sebi also put a freeze on all the power of attorneys that clients of Karvy Stock Broking had given to the firm. So, if you have your demat account, what should you do?
If nothing has gone wrong with your own demat account, your equity shares and bonds in your Karvy Stock Broking’s demat account should still be in your demat account.
Market experts advise to verify the securities’ names and their respective quantities in the latest statement sent by either of the depositories with statements received before.
In case of mismatch, one needs to file a complaint with either the Central Depository Services Ltd (CDSL) or National Securities Depository Ltd (NSDL) – the entity connected to the demat account.
“First of all, the clients should transfer their securities out of their Karvy account. Check the existing Karvy Stock Broking’s demat account. Get the latest statement sent by either of the depositories,” said Brijesh Bhatia, Head of Securities, Dealmoney Securities.
Open a demat account with another depository participant (DP). Submit a closure request form to Karvy and then transfer all your securities to your new demat account.
At the time of opening an account, all investors receive delivery instruction slips (DIS) which are equivalent to a bank chequebook with client ID and serial numbers of the DIS pre-printed, Bhatia said.
“Nowadays, one can open a new demat account easily and speedily within 24 hours,” Bhatia added.
The depositories send an account statement of equity and mutual fund holdings every month. Investors must check those statements regularly.
In case of any incomplete trades, one can file a complaint with the stock exchanges, NSE or BSE.
After the Karvy Stock Broking’s case, Bhatia suggests investors to keep a regular watch over their demat holdings.
First Published: IST