Giving relief to retail investors, market regulator SEBI on Friday said transactions carried out by barred market players on behalf of their clients will not be affected by the ban.
Securities and Exchange Board of India, which cracked down on market players including Karvy and India Bulls for their alleged involvement in IPO scam, also asked clients of the banned entities to switch over to other Depository Participants within 15 days.
The directions to the barred brokers not to buy, sell or deal in the securities market, including in IPOs, "would apply only in transactions in the proprietary accounts of brokers," Sebi said in its clarification, adding that clients of these market players will not be affected by the ban.
The regulator also said that DP transaction of clients would remain unaffected only for 15 days, by which time clients of Karvy DP and Pratik DP should switch over to another DP.
Sebi has clarified that the clients of these brokerages having demat (trading) accounts with them will be free to trade as usual.
The brokerages that have been banned will be allowed to trade on behalf of their clients, which means that investors who have demat (trading) accounts with these brokerages can execute their trades via them.
Sebi had on Thursday barred 24 key operators from the stock market and banned 12 depository participants, including HDFC and IDBI, from opening fresh demat accounts.
Probing the major scam involving public offers during 2003-05, including that of TCS, NTPC, Jet Airways, Yes Bank and IDFC, SEBI also asked RBI, stock market authorities, CBI and Income Tax department to pursue the issue.
In its 256-page interim order after going into abusive practices in 105 IPOs beginning with Maruti, SEBI said all those involved in the scams will be prosecuted.
HDFC Bank, IDBI Bank, Central Bank, ING Vysya Bank, IL&FS and Motilal Oswal have been asked by the market regulator not to open fresh demat accounts.
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