The National Stock Exchange (NSE) has relaxed the definition of what constitutes an inactive trading account.

The period for marking an account as inactive has been changed from 12 to 24 months. Existing clients who are inactive as per earlier guidelines, but are active as per revised guidelines, may be considered as active for trading after updating their details, the exchange said in a circular on Friday.

Earlier, only trading in equity, F&O, commodities and currencies was considered for allowing the account to be considered as active. The NSE circular now allows trades in IPO, mutual funds, sovereign gold bonds, OFS and buybacks to be considered as well.

Any account once marked inactive, can be activated by the broker only after doing an in-person verification either physically or in digital mode. Brokers also have to seek updated client details such as address, mobile, email ID, bank/DP account and income.

“The earlier definition of inactive clients was a bit too tight. The increase in time period and allowing for mutual fund, buyback, OFS and IPO allotment as valid transactions for defining an account as active are changes which will help a lot of bonafide customers immensely,” said Ashish Nanda, President and Head Digital Business, Kotak Securities.

He added that the move will help brokers to improve their client servicing standards and reduce load on their systems.

“Mandating IPV and updated KYC checks for reactivation ensures only genuine, engaged traders can return to the market, tightening security. With less pressure on clients to trade just to avoid inactivity, some accounts may see reduced activity. However, the streamlined reporting frees brokers to focus on active traders, ultimately fostering a more transparent environment,” said a senior broker.

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