“If the client trades after 30 calendar days and before aforesaid upcoming settlement dates of monthly running account settlement cycle, the settlement of account of client shall continue to be done by the Trading member as per the preference of quarterly/monthly as indicated by the client for running account settlement,” a Sebi circular issued on Monday, January 6 said.
Currently, as per a June 16, 2021 circular, 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.
The changes have been made in view of representation made by the Brokers’ Industry Standards Forum (ISF). The body had expressed its reservations on the existing requirement that necessitated the TM to identify such clients daily, potentially leading to the daily settlement of client funds and resulting in procedural inefficiencies. It further said that since the client funds are upstreamed to the clearing corporation, there was 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 with a view 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. Accordingly, it has been decided that the funds of such clients who have not traded in the last 30 calendar days shall be settled on the upcoming settlement dates of the monthly running account settlement cycle as notified by exchanges in the annual calendar issued by them from time to time,” the circular said.
The provisions of this circular come into force with immediate effect.Also Read: January effect favours IT stocks. These 5 factors can seal the fate of Nifty bulls(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
