Joint Press Release on Validation of Client Demat Account Uploaded to the Exchange for Direct Payouts

Chandigarh, June 20, 2025: This is in reference to SEBI Circular No. SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/75 dated June 05, 2024, regarding “Enhancement of Operational Efficiency and Risk Reduction – Payout of Securities Directly to Client Demat Account.”

In line with SEBI’s ongoing efforts to strengthen investor protection and enhance settlement efficiency, a Direct Payout Mechanism has been introduced for Payout of Securities directly to Client Demat Account. Previously, securities received by clients during the payout process were first credited to the Trading Members’ pool account and subsequently transferred to the respective clients’ demat accounts. Under the newly introduced framework, securities payout are being directly credited to investors validated primary demat accounts.

It is imperative that all demat accounts uploaded in the Exchange Unique Client Code (UCC) database belong to the first holder of the demat account which must be active and valid. It may be noted that UCCs where primary demat accounts are not validated in the Capital Market segment shall not be permitted to trade in the said segment with effect from July 7, 2025. In order to ensure smooth and continuous trading in the markets, investors are requested to ensure that they provide demat account details of only those accounts where they are the primary account holder. UCCs with valid primary demat accounts will be considered for direct payouts and will be eligible for the “Permitted to Trade” status.

Investors are urged to ensure that their primary demat accounts details are updated with their Trading Member. Further investors may reach out to their Trading Members for assistance if any.

We seek continued cooperation in ensuring timely validation of client demat accounts to enable a seamless transition to the direct payout mechanism.