Hi everyone,
Can you please let me know what will happen to my pledged shares if I have keep with my broker for availing margin in case of the broker defaults for the wort case. I am very much worried now-a-days. Can broker sell it and take my money and never return it?
Will I get message if my broker sells my pledged shares from NSE or some exchange.
In case if it is not pledged then also what can happen. Can I intimate SEBI after looking at the message that my stock broker sold it without my permission and SEBI will not allow the transaction and return it to my demat.
BTW I have full trust in ZERODHA. Just for the knowledge purpose I want to know what can happen to me in worst condition and how can I react to minimise the loss if it happens.
@siva @nithin

Answered here already

All your securities are held in your own demat. You can register on CDSL easi and monitor them anytime you want.

Today, when you want to pledge securities for F&O margin, the stocks have to be moved from your account to the broker’s account and then pledged to Clearing Corporation. Since the stocks are not in your account, you wouldn’t receive any message if a broker misuses the stocks.

For now, to prevent this SEBI has asked all brokers to upload details of client holdings and funds to the Exchanges on a monthly basis after which the Exchange sends an SMS to the client intimating the fund balance and security balance. Please check this and ensure that its in line with what you expect it to be.

On Console, under the holdings page, we show details of stocks pledged for F&O margin, you could also use this for reconciling.

SEBI has introduced new regulations to counter this risk, if a client wants to pledge stocks for margins, the stocks will remain in the client’s account and a pledge will be marked in favor of the Clearing Corporation. This will come into effect soon. Here’s the SEBI circular:


I tried downloading the cdsl app but, those funds are not showing up because they are pledged.
Wouldn’t you think monthly intimation by broker to exchanges would be a risk since broker could sell it with in 2 days and will get money by settlement after T+2 days and the person to whom those shares belong will not be intimated.
By the time exchanges will know, that broker will just get the money withdrawn.

He also mentioned in last para to close this loop exchanges are coming out with new rule where stocks remain in client demat only even if they are pledged.

Oh that’s good news.By when they will roll it back.

Suppose now after this is implemented, what would happen if the broker sells my shares from my demat. Can I stop the transaction by complaining to cdsl or it gone and I won’t get back a penny?
Please bear me for asking these questions but, I have become really conservative after karvy fraud. I wanted to add funds near to 1 cr in my demat but, I am really wondering what would happen if the fraud happens with me since investor protection fund covers only 25 lacs.

Yes, you can.