TaxTMI 
TaxTMI 
Upstreaming of clients’ funds by Stock Brokers (SBs) / Clearing Members (CMs) to Clearing Corporations (CCs)
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....ring members (CMs), to ensure orderly functioning of the securities market and to protect the interest of investors in securities market. 2. In this regard, with a view to safeguard clients' funds placed with SBs/CMs, it has been decided to require the upstreaming of all client funds received by SBs/CMs to the Clearing Corporations (CCs). 3. 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). The details of the framework are as follows: A. Upstreaming via FDRs created out of ....
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....o markets and overnight Tri-party Repo Dealing and Settlement (TREPS). Such MFOS units should be in dematerialized (demat) form, and must necessarily be pledged with a CC at all times. III. SBs/CMs shall maintain a dedicated demat account (hereinafter referred to as "Client Nodal MFOS Account") for subscription/ redemption of MFOS units. The depositories shall allow subscription/redemption transactions only in the said account. IV. From "Client Nodal MFOS Account", SBs/CMs shall provide MFOS units as collateral to the CC. While providing the units as collateral, SBs/CMs shall identify the end clients. In order to implement the same, a pledge shall be created from the Client Nodal MFOS account to SB/CM margin pledge account of the SB/C....
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....ansferred to USCNBA for further upstreaming it to the CCs. The nomenclature for such accounts shall be "Name of the SB/CM - DSCNB account". III. In addition, CMs, who clear trades for other SBs, shall only use the designated bank account(s) maintained with the nomenclature "Name of the CM -TM prop account" to receive/pay proprietary funds from/to stock brokers. IV. Upstreaming of funds: Funds received on a given day by SBs shall be transferred to CMs, and by CMs to the CC any time during the day, but not later than the respective cutoff times. The respective cutoff times for upstreaming are as follow: Sr. No. Particular Cutoff time 1 CM upstreaming cutoff time To be decided by CC - not earlier than 6:00 PM 2 SB....
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....same day. IX. The SBs/CMs may seek withdrawal of client funds from CCs only under following scenarios: a) Client unpaid securities obligations / MTF Obligations b) Loss due to sale of unpaid securities c) Penalties d) Statutory levies (STT / Stamp Duty / SEBI Turnover Fee) e) Brokerage (including exchange transaction fee) f) Other charges (DP charges, etc.) g) Funds to be released to client on account of regulatory requirements such as running account settlement h) Funds withdrawal request from client SBs/CMs shall provide reconciliation statements to stock exchanges/CCs, as may be required by stock exchanges and CCs. Stock exchange/ CCs shall put in place an appr....
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....nds deposited with CM in the capacity of a client. 7. The provisions of this circular shall come into effect from July 01, 2023. Monitoring mechanisms 8. The stock exchanges and CCs shall create an SOP for monitoring the implementation of provisions of this Circular and put in place a uniform penalty structure for non-compliance. 9. The stock exchanges, depositories, and clearing corporations are directed to: a. bring the provisions of this circular to the notice of stock brokers, depository participants, and clearing members, as the case may be, and also disseminate the same on their websites; b. make amendments to the relevant bye-laws, rules and regulations for the implementation of the above provisions; ....