CIRCULAR
SEBI/HO/MIRSD/POD-1/P/CIR/2024/4 January 12, 2024
To
All Recognized Stock Exchanges
All Registered Trading Members through Stock Exchanges
Dear Sir / Madam,
Sub: Ease of Doing Investments by Investors- Facility of voluntary freezing/
blocking of Trading Accounts by Clients
1. Stock broking industry in India has moved from a call and trade type of scenario
to online mode, wherein the investors use the login ids and passwords provided
to them by the Trading Members. It has been observed that at times, suspicious
activities are noticed by investors, but the facility of freezing/blocking of accounts
is not available with majority of Trading Members.
2. Many a times, investors raise issues of suspicious activities in their trading
accounts and thus, there is an urgent need to address the situation of having a
facility for blocking of trading accounts as it is available for blocking of ATM Cards
and Credit Cards.
3. Similar facility of voluntary blocking/ freezing of demat accounts is already
available for investors and this facility is now proposed to be offered to the
investors for their trading accounts also.
4. In this respect, pursuant to consultation with the Brokers’ Industry Standards
Forum (ISF) and to enhance ease of doing business and ease of investment, it
has been decided that the framework for Trading Members to provide the facility
of voluntary freezing/blocking the online access of the trading account to their
clients on account of suspicious activities shall be laid down on or before April
01, 2024, by the ISF, under the aegis of stock exchanges, in consultation with
SEBI and the same shall, inter-alia, contain necessary guidelines with respect to
the following:
4.1. Detailed policy for voluntary freezing/ blocking the online access of the
trading account of the client including the following:
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 modes through which a client can request/communicate to the Trading
Member for voluntarily blocking the trading accounts;
 issuing of acknowledgement to the clients on receipt of message;
 time period within which the request shall be processed and the trading
account shall be frozen/blocked.
4.2. Action to be taken by the Trading Member pursuant to the receipt of request
for freezing/blocking of the trading account;
4.3. Process for re-enabling the client for trading/transfers;
4.4. Intimation to be provided by the trading member to the clients w.r.t.
introduction of the facility to block the trading accounts.
5. Further, the Stock Exchanges shall ensure that the guidelines so issued under
the aforesaid Framework are implemented by Trading Members with effect from
July 01, 2024. Stock Exchanges shall also put in place an appropriate reporting
requirement by Trading Members to enforce the above system. A compliance
report to this effect shall be submitted to SEBI by Stock Exchanges latest by
August 31, 2024.
6. Stock Exchanges are advised to:
6.1. take necessary steps and put in place necessary systems for implementation
of above.
6.2. make necessary amendments to the relevant bye-laws, rules and regulations
for the implementation of the above.
6.3. bring the provisions of this circular to the notice of Trading Members and also
to disseminate the same on their website.
7. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992 read with Regulation 30 of
SEBI (Stock Brokers) Regulations, 1992, to protect the interests of investors in
securities and to promote the development of, and to regulate the securities
markets.
Yours faithfully,
Aradhana Verma
General Manager
Tel. No.: 022 26449633
aradhanad@sebi.gov.in
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