Markets regulator SEBI on Monday asked exchanges and clearing corporations to initiate measures for liquidating assets of defaulter members within six months of declaring the entities concerned as defaulters.
The watchdog directed that required measures be taken before the appropriate court of law to liquidate moveable and immoveable assets not in possession of stock exchanges and clearing corporations.
The recovery of assets would help in meeting the obligations of clients, stock exchanges and clearing corporations, the Securities and Exchange Board of India (SEBI) said in a circular.
A recognised stock exchange acts as a first-level regulator in the securities market, insofar as trading on its platform by its members is concerned.
“The SE/CC are advised to initiate suitable actions for liquidating the assets (movable and immovable) of defaulter-member, including that of debit balance clients, within six months of declaration of defaulter, for recovery of the assets not in possession of the SE/CC, before appropriate court of law,”the SEBI said.