As an investor, if you have not carried out any investment in the past 30 days, get ready for the money lying in your account to be transferred to your demat account. This is what the Securities and Exchange Board of India (Sebi) has said in its latest circular while issuing instructions to the stock-brokers.
The capital markets regulator has stated that to facilitate ease of doing business as well as to safeguard the investors’ interest, it has decided to revise the requirement of mandatory settlement of such clients’ funds.
Mandatory return of unused funds
“For the clients having credit balance, who have not done any transaction in the 30 calendar days since the last transaction and any amount of such client’s funds is lying with member for more than such 30 calendar days, the entire credit balance of client shall be returned to the client by TM, on the upcoming settlement dates of monthly running account settlement cycle (irrespective of settlement cycle preferred by the client) as stipulated by stock exchanges,” reads the circular dated Jan 6.
Let us understand this with the help of an illustration. For example, you hold a trading account with Zerodha and have ₹38,000 in the account but have not carried out any transaction on this platform the entire month of December. Let us also suppose that the settlement date of the monthly settlement cycle is the 6th of each month. In this case, your entire ₹38,000 will be transferred back on Jan 6th. So if you want to trade the following day, you will again have to transfer money to your wallet.
However, if the investor happens to trade after 30 days but before the settlement cycle date, the settlement in that case will be done by the trading member as per the preference of quarterly/ monthly as indicated by the client for running account settlement.
This is being rolled out with immediate effect.
To sum up, when some investors are not investing on a regular basis, and typically keep some dry powder in their trading account, the money will invariably be transferred back to their bank account on the next settlement date of their monthly cycle.
