BROKER TO RETURN IDLE CASH EVERY MONTH-END
- SEBI has proposed that stock brokers must settle their balance funds/securities lying in the trading accounts of clients on the last day of every month.
- Broker must also send monthly statement to client, and in case of a dispute, client will have to bring it to the notice of brokers within 7 working days.
- Under a practice called "running account authorization", Client give brokers the right to retain funds and securities-to be used to meet settlement/ margin obligations for later trades-continually. However, the funds and securities of the client lying with the broker are prone to several risks.
- If the client request for return of the securities/fund any time during the interim period, the broker will have to transfer it within one working day from the date of receiving the request.
- Some client may be having outstanding transaction/ position in cash/derivative segment on the running account settlement date. In such cases, the broker may make due adjustment by retaining requisite securities/fund from the running account towards such obligations of client and may also retain the funds expected to be required to meet margin obligations for the next 5 working days.
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