Securities Direct Payout Postponed: MIIs Face Delays

New Delhi, Nov 12 (PTI) Market infrastructure institutions (MIIs), including clearing corporations and depositories, on Tuesday decided to put on hold the direct payout of securities to clients' demat accounts after encountering "certain delays" during the initial beta phase.

In the new direct-payout system, clearing corporations will transfer securities directly to investors' accounts, unlike the current system where brokers first hold securities in a pooled account before passing them on to clients.

The initial beta phase of the direct pay-out settlement was launched on Monday, November 11 to improve the settlement process for investors.

While the new system has largely been successful, "certain delays" were observed in some cases during the beta phase, MIIs said in a statement.

"In light of the above, it has been decided to temporarily move the direct pay-out settlement to the erstwhile clearing member pool settlement mechanism effective Tuesday, November 12, 2024," they added.

This will remain in place until further notice, and the revised launch date for the direct pay-out settlement will be announced soon.

The MIIs remain committed to a smooth transition towards a fully optimised direct pay-out settlement mechanism.

Last month, Sebi extended the deadline to implement guidelines mandating the direct payout of securities to clients' demat accounts to November 11 from October 14 scheduled earlier.