What SEBI guidelines apply to frozen or suspicious accounts?

SEBI mandates brokers to monitor and report suspicious activities, including:

• Unusual trading patterns (pump & dump, circular trading)
• Disproportionate trades to declared income
• Sudden spikes in volume or frequency
• Funding through unknown sources
• Client mismatch (trading from third-party accounts)

As per SEBI’s Prevention of Money Laundering (PMLA) Guidelines and Intermediary Code of Conduct, brokers can:

• Temporarily freeze such accounts
• Report STRs (Suspicious Transaction Reports) to FIU-IND
• Request enhanced due diligence and income/transaction justification

Accounts remain frozen until compliance is complete.