Investors will soon be able to block their trading account to stop suspicious activity

The framework for providing this facility of voluntary freezing/blocking shall be laid down on or before April 1, 2024.

If you have noticed suspicious activity using your trading account, you will be able to block the account soon, like you would block a credit card or even the demat account.

Through a January 12 circular, the Securities and Exchange Board of India (SEBI) has told trading members such as stock brokerages to make this facility available from July 1, 2024. Stock exchanges have been asked to ensure trading members implement the guidelines when they are issued.

"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," said the circular.

"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," it added.

The framework for providing this facility of voluntary freezing/blocking shall be laid down on or before April 1, 2024, by the industry standards forum in consultation with SEBI.

The policy will include the following: 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; and the time period within which the request shall be processed and the trading account shall be frozen/blocked.

It will also include the action a trading member has to take once such a request is received and the process of re-enabling the client for traders/ transfers.