The Securities and Exchange Board of India (SEBI) on December 28, 2023, issued the notification regarding the Settlement of the Running Account of the Client’s Funds lying with the Trading Member (TM).
The following has been stated namely: -
• SEBI has decided to settle the running account of clients on Friday and/or Saturday, which streamlines the process of settlement and ensures ease of doing business for various stakeholders viz. stock brokers and banks, while at the same time safeguarding the interests of the investors by ensuring error-free settlement.
• The following changes have been made in the Master Circular on Stock Brokers dated May 17, 2023: -
1. Clause 47.1.1 stands modified as follows: -
“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.”
2. Clause 47.1.2 is modified as follows: -
“Stock exchanges shall, jointly, issue the annual calendar for the settlement of running account (quarterly and monthly) at the beginning of the financial year.”
3. Clause 47.1.3 is inserted as follows: -
“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 the monthly settlement of January 2024.
[Notification No. SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2023/197]
