Settlement of Running Account of Client’s Funds lying with Trading Member (TM)
Summary
SEBI has modified the settlement schedule for running accounts of client funds to allow Trading Members to settle on Friday and/or Saturday instead of a single day. The circular mandates that Stock Exchanges jointly issue an annual calendar for these settlements at the beginning of each financial year. Additionally, new safeguards require funds from settled clients to remain in the Up Streaming Client Nodal Bank Account to prevent misuse.
Text
SEBI has decided to accept the recommendation to settle the running account of clients on Friday and/or Saturday.
The TM, after considering the End of the Day (EOD) obligation of funds across all the Exchanges, shall settle the running accounts at the choice of the clients on quarterly and monthly basis, on the dates stipulated by the Stock Exchanges.
Stock exchanges shall, jointly, issue the annual calendar for the settlement of running account (quarterly and monthly) at the beginning of the financial year.
TM shall ensure that funds, if any, received from clients, whose running account has been settled, remain in the “Up Streaming Client Nodal Bank Account” and no such funds shall be used for settlement of running account of other clients. Stock Exchanges shall evolve a monitoring mechanism for this purpose.
The provisions of this circular shall be applicable with effect from the quarterly settlement of Jan-Mar 2024 and monthly settlement of January 2024.
Stock Exchanges shall bring the provisions of this Circular to the notice of their members, disseminate on websites, make amendments to Bye-laws/Rules/Regulations, issue operational guidelines, monitor timely settlement, enforce reporting requirements, and communicate implementation status to SEBI.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992.
Source: SecMarx — Settlement of Running Account of Client’s Funds lying with Trading Member (TM). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.