Sebi eases settlement norms for brokerage accounts inactive over 30 days

Settlements to happen once a month for accounts inactive for over 30 days

The Securities and Exchange Board of India (Sebi) on Monday relaxed settlement norms for brokerage accounts remaining inactive for more than 30 days. Brokers will now have to return the money lying in such idle accounts on a pre-decided settlement date every month.

 

Till now, brokers were required to return funds within three working days of identifying inactivity.

 

"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," Sebi said.

 

 

According to Sebi, the new norms will lead to ease of doing business for brokers as it will save them from the hassle of settling accounts daily.

 

"It has been represented by Brokers’ Industry Standards  Forum  (ISF) that this requirement necessitates trading members to identify such clients daily, potentially leading to the daily settlement of client funds and resulting in procedural inefficiencies," the regulator stated.

 

"If the client trades after 30 calendar days and before aforesaid upcoming settlement dates of the monthly running account settlement cycle, the settlement of the account of the 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," Sebi said.