The Securities and Exchange Board of India (Sebi) reduced settlement guidelines for brokerage accounts that had been inactive for more than 30 days. Brokers will now be required to repay funds in such idle accounts on a predetermined settlement date each month.
Until this, brokers were supposed to restore funds within three working days of finding 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," according to Sebi.
According to Sebi, the new regulations will make it easier for brokers to do business by eliminating the complexity of settling accounts on a daily basis.
"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," according to the regulator.
"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," according to Sebi.
