No 3-day Fund Settlement for Clients if No Transaction in Past 30 Days: SEBI
Moneylife Digital Team 06 January 2025
Funds of client-investors who have not done any transaction in the past 30 days will be settled in the upcoming dates of the monthly running account settlement cycle as notified by exchanges in the annual calendar issued by them from time to time, says market regulator Securities and Exchange Board of India (SEBI).
 
At present, the accounts of clients who have not done any transaction in the last 30 days, are required to be settled by the trading member (TM) within the next three working days.
 
However, SEBI says the Brokers' Industry Standards Forum (ISF) informed that settling client funds in three days necessitates TM to identify such clients daily, potentially leading to the daily settlement of client funds and resulting in procedural inefficiencies. It has further been represented that since the client funds are upstreamed to the clearing corporation in any way, there is a need to revisit the time for settling such client's funds.
 
"Based on the above coupled with the recommendations received from Brokers' ISF and to facilitate ease of doing business as well as to safeguard the investors' interest, it has been decided to revise the requirement of mandatory settlement of such clients' funds," the market regulator says.
 
In its circular, SEBI says, "For the clients having credit balance, who have not done any transaction in the 30 calendar days since the last transaction and any amount of such client's funds is lying with the member for more than such 30 calendar days, the entire credit balance of client shall be returned to the client by TM, on the upcoming settlement dates of monthly running account settlement cycle (irrespective of settlement cycle preferred by the client) as stipulated by stock exchanges."
 
"However, if the client trades after 30 calendar days and before aforesaid upcoming settlement dates of the monthly running account settlement cycle, the settlement of the account of the client shall continue to be done by the trading member as per the preference of quarterly or monthly as indicated by the client for running account settlement," it added.
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dunbaka
1 month ago
420 SEBI & Brokers.
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