Very well said. Some people are never able to think out of the box. While some people lead by example and execute the unthinkable.
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Agreed, we should put the ideas.
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Back in the day, sometime in 2018-19 or so, we did have such a facility. We had to retract it for several reasons. I’ve listed the various issues below:
(a) I’m not sure if you’re aware, but there’s a process where brokers are required to transfer back any utilized sums of money to the investor’s account. While earlier, brokers had the choice of transferring funds once in a period of 90 days, regulators have mandated that these payouts now be made on the first Friday of every quarter. The problem with these “auto” purchases is that the regulator will see this as a way of avoiding quarterly payouts since the free funds are now utilised to transact in liquidcase or any such other instrument.
There was a specific circular from stock exchanges, prohibiting brokers from running such schemes, here’s the link to the circular. Excerpt from the circular:
(b) As someone rightly pointed out above, a broker cannot place orders on behalf of the client without the client’s explicit permission. The menace of unauthorized trading in the markets was rampant. SEBI has issued clear guidelines asking brokers to have adequate evidence before brokers can place orders on behalf of the client. Here’s the link to the circular. Again, excerpt here:
(c) If I’m not wrong, liquidfunds can lose money. What happens if the value of the investment goes down? This is not a risk any broker will wish to take.
(d) To address the concern you’ve raised, SEBI has asked brokers to offer either a TSBA facility or a 3-in-1 facility. There are more details here. At Zerodha, we’re offering 3-in-1 already, and are working on offering TSBA soon. This, however will be only for the equity segment at the moment since the framework for derivatives under TSBA is yet to be conceived.
(e) Zerodha allows an equity SIP feature, the details of which are available here. It’s perhaps a hacky way of trying to achieve what you want to. Please explore and give it a thought.
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@VenuMadhav Please enable the facility to enable fund withdrawals to secondary bank accounts as well. This is a long standing demand and other top brokers already facilitate this like angel one and dhan. I don’t understand what’s stopping zerodha from doing this.
Will consider it as feedback.
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Thanks siva. Hope this will be implemented soon enough.
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