SEBI Proposes Changes to Client Fund Settlement Rules

SEBI proposed a new rule to settle clients' funds, who haven't traded in 30 days, on designated running account settlement dates. This aims to simplify business processes and protect investors, addressing industry concerns about inefficiencies in the current daily settlement system.

The Securities and Exchange Board of India (SEBI) has introduced a proposal aimed at revising the settlement schedule for client funds. Under this proposal, funds of clients who have not engaged in trading activity over the previous 30 days will be settled on specific upcoming settlement dates.

This change, detailed in a consultation paper, is part of SEBI's broader effort to streamline business operations while ensuring investor protection. The adjustment will align with the monthly running account settlement cycle as outlined in annual calendars issued by stock exchanges.

The current system requires stock brokers to identify and potentially settle these accounts daily, a process deemed inefficient by the Brokers' Industry Standards Forum. SEBI invites public feedback on the proposed changes until December 26.

(With inputs from agencies.)