SEBI: The Securities and Exchange Board of India (SEBI) has decided to relax the settlement rules for client accounts that have been closed for 30 days.
According to the new SEBI rules, if a client has traded after 30 calendar days and before the date of the next monthly settlement period, then its settlement can be done on the dates notified by the exchange in the annual calendar.
“If the client trades after 30 days and before the subsequent dates of the monthly running account settlement cycle, the client’s account will be settled by the trading member as per the client’s quarterly/monthly settlement preference,” said a circular issued by Sebi on Monday.
What was the rule earlier?
As per a circular dated June 16, 2021, the accounts of clients who have not made any transactions in the last 30 days were required to be settled by the Trading Member (TM) within the next three working days.
This rule of SEBI was objected to by the Brokers’ Industry Standards Forum (ISF). The forum said that under the existing rule, trading members had to identify such clients on a daily basis, which led to daily settlement of funds. This led to procedural complexities and wastage of time.
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