The National Stock Exchange of India Limited on 23rd September 2022, issued revised guidelines/ clarifications on Settlement of Running Account of Client’s Funds lying with Trading Member (TM)” in the form of frequently asked questions (FAQs).
NSE has notified that, for the clients who have opted for Monthly settlement, running account shall be settled on first Friday of each month. If first Friday is a trading holiday, then such settlement shall happen on the previous trading day. The settlement of running account of funds of the client shall be done by the trading member after considering the End of the day (EOD) obligation of funds as on the date of settlement across all the Exchanges on first Friday of the Quarter (i.e., Apr-Jun, Jul Sep, Oct-Dec, Jan–Mar) for all the clients i.e. the running account of funds shall be settled on first Friday of October 2022, January 2023, April 2023, July 2023 and so on.
In case a client wishes to maintain a running account for its funds with the trading member, the client has to authorize the member in writing to retain its funds. Such authorization should also contain:
- Mandate of the client as to whether the settlement of funds should be done on monthly / quarterly basis.
- A clause stating that the Client may revoke the authorization at any time (i.e without notice).
If the client has an open position in the derivatives segment, then the date of contract expiry or the date on which position is closed may be treated as last transaction date, for the purpose of computing 30 calendar days for returning the credit balance to such clients. However, members shall ensure settlement of running account of funds on first Friday of the Month or Quarter as per the preference of the client
Further, NSE has clarified that the Excess securities (in the form of margin pledge/re-pledge) with Trading Member (TM), Clearing Member (CM) or with Clearing Corporation (CC), after adjustment of the 225% of the margin liability need not be unpledged for the purpose of periodic settlement.
