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SEBI Instructs QSBs to Provide UPI Mechanism and 3-in-1 Trading Facility to Investors Starting 1st February 2025.

Banking & Finance | Dated: 22 Nov 2024

On 11th November 2024, the Securities and Exchange Board of India (SEBI) directed all Qualified Stock Brokers (QSBs) to offer either the facility of trading in the secondary market using the Unified Payments Interface (UPI)-based block mechanism to their clients, similar to the Application Supported by Blocked Account (ASBA) facility, or the 3-in-1 trading account facility to their investors.

🎯 Key Highlights:

- This new direction for QSBs will come into effect from 1st February 2025.
- SEBI defines QSBs as entities which, by virtue of their size and scale of operations, can impact investors and the securities market.

💡 Other Important Facts:

(i) As per SEBI's directions, these QSBs are now required to offer one of these facilities, in addition to the current mode of trading.
(ii) Trading Members (TMs) are classified as QSBs based on various parameters such as the size and scale of their operations, including the number of active clients, the total assets held by clients with the TM, the end-of-day margin of all clients, and the trading volume of the TM.
(iii) A UPI block mechanism will enable clients to trade in the secondary market based on blocked funds in their bank accounts instead of transferring the funds upfront to the trading member.

📚 Test Your Knowledge:

Recently, which organization instructed QSBs to provide UPI mechanism and 3-in-1 trading facility to investors starting 1st February 2025?

Correct Answer: SEBI

🚀 Quick Recap:

About SEBI

Chairperson: Madhabi Puri Buch
Headquarter : Mumbai