Mumbai, Aug. 8: The Securities and Appellate Tribunal today stayed an order of the Securities and Exchange Board of India (Sebi) that prohibited Karvy Stock Broking Ltd from opening fresh demat accounts till the end of the calendar year.

This verdict is pending the tribunal’s final order in the case.

Karvy can now open demat accounts, though it will have to wait for the tribunal’s final order.

Sebi had earlier prohibited Karvy, in its role of a depository participant, from opening fresh demat accounts.

The regulator had also suspended Karvy as a stockbroker for three months.

These restrictions were imposed after the market regulator pulled up Karvy for its involvement in the IPO allotment scam of 2005.

Later, in May last year, G. Anantharaman, whole-time member, Sebi, issued a post hearing order in relation to Karvy Stock Broking, Karvy Computershare, Karvy Consultants, Jhaveri Securities and Magnum Equity Services.

After an opportunity of personal hearing was given to Karvy Stock Broking, Karvy Computershare and Karvy Consultants, wherein oral and written submissions were made by these entities, Sebi said that Karvy Stock Broking was directed not to act as a depository participant, pending an enquiry and the passing of the final order.

Karvy was allowed to act as the depository participant for existing beneficial owners.

It was also allowed to transfer the demat account of an existing beneficial owner to another Sebi-registered depository participant, on request.