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The stock market regulator SEBI has eased the rules on settlement of unutilized amount lying with stockbrokers in the customer’s account. Under this, now the share brokers will be able to settle the unused amount (running account) in the customer’s account on the first Friday or Saturday of the quarter or month.
Trading members shall settle ‘Running Accounts’ as per the choice of customers on quarterly and monthly basis on dates fixed by the Stock Exchange after taking into account End of Day (EOD) fund liability.
What SEBI said: The Securities and Exchange Board of India (SEBI) has issued a joint notification to stock exchanges at the beginning of the financial year for settlement of ‘running’ accounts (quarterly and monthly) to ensure uniformity and clarity in such monthly and quarterly dates. Settlement of customers’ accounts. A calendar has been asked to be released.
Sebi has said in a circular that the new rule will be applicable for quarterly settlement for January-March, 2024 and monthly settlement for January, 2024. Under the current system, SEBI has made it mandatory to settle the amount in the customer’s account on the first Friday of every quarter or month.
The brokers appealed: The move follows a request from the Industry Standards Forum (ISF) of brokers. He said that due to same day settlement, brokers face difficulty. Busy activities on settlement day are likely to cause errors and omissions. He suggested that trading members should be allowed to settle ‘running’ accounts of customers on Fridays and/or Saturdays due to operational issues.
According to the circular, “After due consideration, SEBI has decided to accept the recommendation to settle customer current accounts on Fridays and/or Saturdays. This will streamline the settlement process and facilitate the functioning of the various parties involved.”