MUMBAI, India – SEBI, the capital markets regulator, has made a request to the brokers for a unique client code (UCC) link of investors to their Demat and PAN account in an attempt to avoid the digression of securities.
The UCC or unique client code is given to each investor. It can be remembered how SEBI has devised a plan specifically for stock exchanges and for the stocks to track their unique client code (UCC) using the investor’s Demat account.
This has been implemented to prevent the illegal transferring of the investor’s stocks to their non-client accounts.
Furthermore, SEBI also released a statement saying that their main goal is to speed up and improve the facilitation with the mechanism.
The watchdog stated in a circular held last Friday that both the depositories and stock exchanges shall be mapping all the existing unique client codes using the Demat account of their investors with the recent list by 31st of December, 2019.
This command is part of the early warning mechanism of SEBI that was put into action in an attempt to detect at first phase, any diversion of the investor’s securities by the stockbroker. In that way, they can execute the necessary preventive measures for the protection of their clients.
A statement from the SEBI directive says that the UCC data, on a one-time basis, can be joint with the depositories by the 39th of November, 2019. Also, data from the newly-released UCCs can also be shared regularly. SEBI has requested the Stock Exchanges and Depositories to put on an instrument that will cater to any of the complaints from their clients, as long as it concerns mapping their UCC using the Demat accounts.
SEBI says that the Demat account of the client shall be mapping the UCC of the trading member to the investor. This allows the client to trade using numerous TMs, and in this case, the UCC used shall also be used to map one or more Demat accounts.
Stock Exchanges and Depositories have also received a request from the SEBI that all inactive UCCs shall not be used in other transactions. It should be cleared out while they are mapping their UCCs of their clients using the Demat account. In that way, they can ensure that no illegal transactions or misuse of the stocks happens. It also gives the client an assurance of a reliable security and support system by the SEBI.