Retail investors might get custodians, all you need to know about them

Custodians, like intermediaries for foreign portfolio investors (FPIs), will manage the back-end operations of investors after a trade has been carried out

The Securities and Exchange Board of India (Sebi) is planning to tighten the rules for trading settlement and introduce custodians for retail investors in order to protect their interests from defaulting brokers, according to reports. These proposals were discussed in Sebi’s Secondary Market Advisory Committee meeting recently, reports suggest.

Custodians, like intermediaries for foreign portfolio investors (FPIs), will manage the back-end operations of investors after a trade is done. The idea is to ensure that brokers do not misuse clients’ accounts and sell shares without their permission, unless the client has defaulted.

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