Quarterly Settlement in Trading Account

Quarterly Settlement in Trading Account

According to SEBI’s Monthly/Quarterly Settlement in Trading Account Policy dated 27th July 2022, the broker must refund unutilized funds to the client’s bank account on a monthly/quarterly basis, based on the client’s preferred frequency (either quarterly or monthly).

With effect from October 1, 2022, the unused funds will be settled on the first Friday of October, January, April, and July (if you have chosen quarterly settlement). However, if Friday is not a trading day, the settlement will take place on the preceding business day.

In this regard, Investors are requested to note that the first Friday of the Quarter of April – June 2023 (i.e. April 7, 2023) being a trading holiday, the settlement of the running account of the client’s funds in accordance with aforesaid circulars shall be carried out by Alice Blue on the previous trading day i.e. April 6, 2023 (Thursday).

That was the basic idea of the SEBI’s Guideline, but certain things still need to be conveyed clearly. Read along to have a complete understanding of the new guideline.

  1. If the balance of your trading account is more than zero on the day of settlement, then the whole amount will be transferred to your bank account.
  1. If a client has an open trade position on the day that the running account of funds is supposed to be settled, the stockbroker may retain funds in the following ways:
    • The total amount of funds that need to be paid at the end of the day to settle the running account for T-day and T-1 day.
    • Margin liability on the day of running account settlement in all segments and extra margins (up to 125% of total margin liability on the day of settlement). The margin liability shall include the end-of-day margin requirement minus the MTM and pay-in obligation; as a result, the Stockbroker may keep 225% of the overall margin liability across all exchange segments.
    • Prior to making any adjustments to client funds, the stockbroker will first make any necessary adjustments to the value of securities (after applying appropriate haircut) approved as collateral from the clients by way of a ‘margin pledge’ generated in the Depository system for the purpose of margin and the value of commodities (after applying appropriate haircut).
    • After the 225% margin rule is applied, if your trading account has a credit balance, the stockbroker will have to send that money back to your bank account.
  1. If a client has a positive credit balance and hasn’t bought or sold anything in the 30 calendar days since their last transaction, the stockbroker must return the credit balance to the client within the next three business days, no matter when the running account was last settled.

Whether you trade often or not, you need to know how your funds and securities are moving so you can make better financial decisions. With this report’s help, you’ll get a full summary of the funds and securities your broker has collected from you or given you. 

In addition, it shows the pay-in requirements of your fund and the minimum margin that must be kept in your account, according to SEBI rules as of the settlement date. As soon as the settlement is processed, your Quarterly Payout Report will be sent to the email address you gave when you signed up.

If you need further clarification, contact our centralized customer support at 08035215000, 080-45490850, 09.00 – 18.00, Monday – Saturday. You may also mail your queries to [email protected].

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