Policy on Treatment of Inactive / Dormant Client Accounts

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Document title Policy on Treatment of Inactive / Dormant Client Accounts
Entity Choice Equity Broking Private Limited (CEBPL)
Policy owner Compliance / Risk Management, CEBPL
Version 2.0
Reviewed/approved by Board — 22.04.2026 (previous review: 21.04.2025)
Effective date 01.05.2026
Regulatory basis SEBI Circular MIRSD/SE/Cir-19/2009 dated 03.12.2009; exchange guidelines on treatment of inactive trading accounts — NSE/INSP/43488 dated 10.02.2020 and NSE/INSP/64718 dated 25.10.2024, and the corresponding BSE, MCX and NCDEX circulars of even date; SEBI Master Circular on KYC dated 12.10.2023 (IPV / VIPV); applicable exchange running-account settlement circulars. Read with the client protection and Code-of-Conduct obligations under the SEBI (Stock Brokers) Regulations, 2026.
Next review due Annually, or earlier upon any SEBI / exchange circular affecting this policy

1. Purpose & Regulatory Basis

This policy sets out the manner in which Choice Equity Broking Private Limited (“CEBPL”) identifies and treats inactive/dormant client trading accounts, and the process for their reactivation and for the return of client assets. CEBPL is a member of NSE, BSE, MCX and NCDEX.

It is framed pursuant to SEBI Circular MIRSD/SE/Cir-19/2009 dated December 3, 2009 (“Dealings between trading members and their clients”), under which stock brokers are required to frame and implement a policy on the treatment of inactive accounts, and the exchange guidelines issued to ensure uniformity across stock brokers, namely NSE/INSP/43488 dated February 10, 2020 and NSE/INSP/64718 dated October 25, 2024, and the corresponding BSE, MCX and NCDEX circulars of even date.

2. Definition of Inactive Trading Account

In the case of a trading account, the term “inactive account” refers to an account in which none of the following activities has been carried out by the client in the last 24 (twenty-four) months:

  • Trading or participation in OFS / buy-back / Open Offer across any of the exchanges or segments through CEBPL (segments: Cash / Equity Derivatives / Currency Derivatives / Commodity Derivatives / EGR / Debt / Online Bond Platform / Execution Only Platform / any other segment permitted by SEBI or the exchanges from time to time); or
  • A transaction in the nature of applying for / subscribing to IPOs (where the IPO bid is successful and not cancelled) / SGBs / Mutual Funds (lump-sum investment or successful SIP instalment payments) on the mutual fund platform of the exchanges through CEBPL; or
  • Modification/updation of the client’s e-mail ID / mobile number/address in the KYC record through CEBPL, where the same has been uploaded to the KRA to ensure Validated / Registered status.

3. Flagging & Reporting of Inactive Accounts

Accounts identified as inactive on the above criteria are flagged as “Inactive” in the UCC database of the respective exchanges. The following apply:

  • Inactive clients having NIL balances are not required to be uploaded in the daily Holding Statement / segregation and collateral submissions to the exchanges; however, details of clients having funds or securities balances are reported even where the UCC has been flagged as “Inactive”;
  • No solicitation to trade: CEBPL may notify a client about the inactivity (or impending inactivity) of the account, but such communication shall not ask the client to trade merely in order to prevent the account from being flagged as inactive. Any non-compliance in this regard is viewed seriously.

4. Consequence of Becoming Inactive / Dormant

Where a client becomes inactive, the account is blocked and the client is not permitted to execute a fresh transaction in the account until the account is reactivated in accordance with Section 5.

5. Reactivation of Account

Any further trading by an inactive client is allowed only after CEBPL undertakes sufficient due diligence and obtains updated KYC information from the client. The following process is followed:

  • Mandatory compliance with the In-Person Verification / Video In-Person Verification (IPV / VIPV) requirement specified in the SEBI Master Circular on KYC dated October 12, 2023;
  • Obtaining updated KYC information and documents where there is any change in client details, and updating CEBPL’s records, the UCC records of the respective exchanges and the KRA. Where the client’s status with the KRA is Validated / Registered through CEBPL, the details and documents are fetched from the KRA record and displayed for the client’s confirmation; where the client confirms no change, verifiable logs of the confirmation are maintained;
  • Where the client’s KRA status is not Validated (i.e. “On-hold” / “Rejected” / “Registered” through another intermediary, etc.), seeking basic details (address, mobile, e-mail, bank / DP account, income, etc.) and the documents required by the KRA, and uploading the same to the KRA to achieve Validated / Registered status before permitting the client to trade;
  • For a derivatives account, the client additionally provides proof of income for the latest financial year as on the date of the reactivation request; and
  • For a corporate account, the client additionally submits a copy of the balance sheet for the last two years and the shareholding pattern, where there is any change from the records submitted earlier.

A client may submit a reactivation request by (i) submitting a physical reactivation form, or (ii) through CEBPL’s website or mobile application at the time of login. The reactivation option is available to the client and does not require the additional steps applicable under CEBPL’s Policy on Voluntary Freezing / Blocking of Online Access of Trading Accounts by Clients; reactivation is governed solely by the due diligence process in this Section 5.

Once an inactive trading account is reactivated, the computation of the next 24-month period for identifying the client as inactive is reckoned from the date of the last reactivation of the trading account.

6. Return of Client Assets

For clients classified as inactive / dormant, CEBPL ensures the settlement and return of client assets — funds, securities and collaterals — lying with it. The running-account settlement is carried out in accordance with the applicable exchange settlement circulars, and CEBPL maintains a verifiable trail of efforts made to trace and settle the accounts of inactive clients.

7. Frequency of Status Check

The status of clients’ accounts is checked on a monthly basis to identify accounts that have become inactive and to action reactivation requests and asset settlements.

8. Review of Policy

This policy shall be reviewed at least annually, and additionally whenever a statutory authority, SEBI or the exchanges introduce changes, or where otherwise necessary on account of business needs or the Risk Management Policy. The policy is reviewed by the Compliance Officer / Director, with changes placed before the Board at the first meeting held after such changes are introduced.