This is WORRYING. Why are they purposefully avoiding to reply such an important query? We need to get the official answer from zerodha on this.
Could you please share more information on this rule and the exact date from which it will be implemented? The risk as mentioned by @neha1101 is very much there with many brokers out there.
And please checkout this latest article published yesterday in Economic Times, I am sharing the link to the Cached Page, because otherwise you need premium access to read the full article -
According to the article - Almost Rs 50,000 crore of investor funds were held with brokers and clearing members as on 6 January 2023.
Clearly it is a big source of income for many brokers out there and therefor they are not openly talking about this.
“In its current form, the proposal would have a huge impact once cash goes out of the broker’s balance sheet. Most broking firms will have to change their business model since many large ones have substantial float income,” said Gurpreet Sidana, chief operating officer, Religare Broking.
“It’s a good move from the point of view of clients’ funds. But, upstreaming all funds to clearing corporations will hurt other income of broking firms. We will have to figure out how to maintain our revenue growth,” said Prabhakar Tiwari, chief growth officer, Angel One.
And if anyone here is aware regarding who is the Clearing Member for zerodha, then please share this information.
I think that if we want to avoid the risk of having our money lying unused at the broker end, then we should first invest it into some Debt Funds etc. and then should pledge them with the broker to get the margin. This will save us, even if the broker goes bankrupt for any xyz reasons of any type. If my current assumption is wrong, then please kindly correct me on this thing.
Thanks a lot