Measure for ease of doing business - Settlement of Account of Clients who have not traded in the last 30 days
Summary
SEBI has revised the timeline for settling funds of clients who have not traded in the last 30 calendar days to align with monthly settlement cycles. This change aims to reduce procedural inefficiencies for trading members while safeguarding investor interests. The modification applies to Clause 5.4 of the June 2021 Circular and Clause 47.4 of the Master Circular for Stock Brokers.
Text
SEBI issued guidelines regarding settlement of running account of client’s funds by stock brokers vide Circular no. SEBI/HO/MIRSD/DOP/P/CIR/2021/577 dated June 16, 2021 and Clause 47 of Master Circular for Stock Brokers dated August 09, 2024.
Previously, accounts of clients with no transactions in the last 30 days were required to be settled within three working days, a practice represented by ISF as causing procedural inefficiencies.
Funds of 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.
Clause 5.4 of the Circular dated June 16, 2021 and Clause 47.4 of the Master Circular are modified to require return of entire credit balance on upcoming monthly settlement dates irrespective of client's preferred cycle.
If the client trades after 30 calendar days but before the upcoming monthly settlement date, settlement shall continue as per the client's indicated preference for quarterly or monthly running account settlement.
The provisions of this circular shall come into force with immediate effect.
Stock Exchanges shall bring the provisions to the notice of their members, disseminate them on websites, and make necessary amendments to Bye-laws, Rules, and Regulations.
This circular is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 30 of Chapter VII of SEBI (Stock Brokers) Regulations, 1992.
Source: SecMarx — Measure for ease of doing business - Settlement of Account of Clients who have not traded in the last 30 days. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.