The National Stock Exchange Board of India (NSE) has directed Stock Brokers/Depository Participants to Maintain Daily Reconciliation Statement. This Circular was issued on 9th March, 2023.
It may be recalled that SEBI had earlier issued a Circular on Enhanced Supervision of Stock Brokers/Depository Participants. This circular was dated 26th September, 2016.
The Circular states that “Transfer of funds between “Name of Stock Broker – Client Account” and “Name of Stock Broker – Settlement Account” and client’s own bank accounts is permitted. Transfer of funds from “Name of Stock Broker – Client Account” to “Name of Stock Broker – Proprietary Account” is permitted only for legitimate purposes, such as, recovery of brokerage, statutory dues, funds shortfall of debit balance clients which has been met by the stock broker, etc. For such transfer of funds, stock broker shall maintain daily reconciliation statement clearly indicating the amount of funds transferred.”
However, it was observed that when the NSE sought daily reconciliation statement from the trading members during inspections or offsite supervision, they are not able to promptly furnish the same. Hence, it is reiterated that the members shall maintain the reconciliation statement on a daily basis and provide the same as and when sought by the relevant authority.