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HC ruled on securities payout circular requiring direct transfer ...


Direct Demat Transfer Rules Relaxed for Index Derivatives with Cash Margins, No DP License Needed.

January 25, 2025

Case Laws     SEBI     HC

HC ruled on securities payout circular requiring direct transfer to client demat accounts. Trading members not engaged as depository participants do not require DP license. For index derivatives with cash margins, clients need not maintain demat accounts, provided they deal exclusively in index derivatives without physical delivery requirements. Broker must ensure compliance. For all other trades, original circular mandating demat accounts remains applicable. Court disposed petition after petitioner acknowledged clarifications addressed their concerns. Ruling maintains regulatory framework while providing specific exemption for index derivative transactions with cash-only margins.

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