Capital markets regulator SEBI has asked brokers to link unique client code (UCC) of investors to their PAN and demat account in a bid to prevent diversion of securities.
Capital markets regulator SEBI has asked brokers to link unique client code (UCC) of investors to their PAN and demat account in a bid to prevent diversion of securities. Unique Client Code or UCC is assigned to each investor. Notably, SEBI has also devised a mechanism for stock exchanges and depositories to map the unique client code (UCC) with the demat account of an investor. The move is mainly aimed to prevent brokers from illegally diverting stocks of investors to other non-client accounts. Further, SEBI said that the aim is to facilitate ease in reconciliation. “Stock exchanges and depositories shall map the existing UCCs with the demat account of the clients latest by December 31, 2019,” the watchdog said in a circular on Friday. The directive is part of SEBI’s ‘Early Warning Mechanism’ that was put in place to detect the diversion of client’s securities by the stock broker at an early stage so as to take appropriate preventive measures.
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According to the SEBI directive, the UCC data is to be shared with the depositories on a one-time basis by November 30, 2019, and subsequently the incremental data in respect of new UCCs shall be shared on a daily basis. Further, SEBI has directed Stock Exchanges and Depositories to put a mechanism in place to address clients’ complaints with regard to UCC mapping with their demat accounts.
“UCC allotted by the trading member (TM) to the client shall be mapped with the demat account of the client. A client may trade through multiple TMs in which case each such UCC shall be mapped with one or more demat account(s),” SEBI said. As a part of its efforts, SEBI has directed Stock Exchanges and Depositories to ensure that inactive, non-operational UCCs are not misused and also put in place a mechanism to ensure that inactive, non-operational UCCs are weeded out in the process of mapping clients’ UCC with their demat account.