What to do if you are a Karvy client?

What to do if you are a Karvy client?

Representative image. (Photo/Pixabay)

After one of the biggest defaults by an equity brokerage firm on client dues, market regulator SEBI has barred Karvy Stock Broking from taking on a new client and executing trades. But the woes don’t stop here! The investigations are likely to focus on many other brokerages as reported by DH earlier, and about three dozen of them are under the radar.

Also read — Karvy order may lead to wider probe on brokerages

What should investors do?

There is an option of clients opening a new Demat account and move securities that are with the Karvy Demat account to it. This, however, involves a lot of paperwork such as indemnity bonds. Also, since the depositories (CSDL and NDSL) have been asked to monitor the movement of securities, according to the SEBI order, from client Demat accounts, this will slow down the process further.

If you have idle funds lying in your Karvy brokerage account, you should transfer them to your own bank account immediately.

Also read — Acted as facilitator, didn’t mislead customers: Karvy

According to a 2009 SEBI circular, all unutilised client funds have to be transferred by the broker concerned to the client’s bank account at least once every 90 days. However, in your case, the 90 days may not have lapsed.

If your trades have failed due to the Karvy defaults or if your securities have been transferred to Karvy’s own accounts or you notice some other irregularity, you should file a complaint with SEBI.

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