SEBI on Tuesday met stock brokers but did not grant any more extension on implementation of new trading norms that will come into effect from September.

SEBI has made it mandatory to collect upfront margin in the cash segment and asked brokers to discontinue the use of Power of Attorney (PoA) for the purpose of share pledging. Brokers were meeting SEBI with the hope that the implementation of norms would get further delayed as they said that depository systems were not ready.

Earlier, there was no requirement of upfront margin to be paid for buying and selling of stocks in the cash segment. That will change from September and at least 30 percent upfront margin is required even in the cash segment. Brokers used shares as margin and as PoA was issued to them by clients, they transferred their shares from one account to another. This use of PoA for creation pledge to account for initial trading margin, has been discontinued. Instead, SEBI has said that brokers should create a legal pledge of share based on specific instructions. This creation and revocation of pledge attracts charges from the depository players (DPs) like Central Depository Services Ltd (CDSL) and National Services Depository Ltd (NSDL) and has to be borne by clients.

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