Firm begins activating frozen Karvy accounts

Hyderabad: Broking and advisory firm IIFL Securities Ltd said it has started activation of 11 lakh

Karvy

Stock Broking Ltd’s demat accounts that were frozen for over a year following the markets regulator Securities & Exchange Board of India (Sebi)’s directive.

According to IIFL, the total assets under management for these 11 lakh Karvy demat accounts stands at Rs 3 lakh crore. The exercise was kicked off after IIFL recently won the official bid to acquire all the demat accounts held by Karvy with National Securities Depository Ltd and Central Depository Services Ltd.

Sebi had decided to auction Karvy’s demat and trading accounts to compensate its clients for the losses they suffered after the demat scam came to light in November 2019. The bidding process began in early February and IIFL securities bagged the demat accounts. With this, all these Karvy account holders can now begin trading and investing activities with IIFL.

The Karvy demat scam came to light in November 2019 and Sebi banned Karvy from taking new clients after it found the broking firm had illegally pledged funds and securities of clients.

Commenting on the development, Sandeep Bhardwaj, CEO-retail, IIFL Securities, said with this the accounts of all Karvy demat account holders have been unfrozen and investors can start trading or investing with IIFL Securities.

He also said IIFL Securities has created a dedicated web platform and phone number for all Karvy demat account holders to facilitate restarting of these accounts and has, a goodwill gesture, waived off the first-year annual maintenance contract charges on these accounts.