Search for an answer or browse help topics to create a ticket
View all categories

What is Quarterly Settlement?

Settlement of funds and securities through Quarterly Settlement is an initiative by SEBI to ensure brokers do not misuse client funds and/or securities.

In order to safeguard the interest of the investor/trader, SEBI mandated all stockbrokers to reverse any funds that are lying in the trading account back to the bank account of the client. This Quarterly settlement has to be done for both funds and securities of the clients. SEBI mandates that the settlement has to be done once every month or quarter.

However, SEBI's rule is that any account where the balance is less than Rs 10,000 need not be settled meaning the funds needn't be transferred back to the client's account. Also, it allows the broker to block an additional 125% margins for any open position held by the client and then reverse any excess funds lying in the account. 

However, if you haven't made any trades in the month/quarter considered for settlement, in this case, the money in your trading account will be sent to your bank account. Also, if stocks are pledged but margin is not utilized, the pledged stocks are unpledged and transferred back to the client demat account once in a quarter. A new pledge request has to be initiated if the client wants to use them as collateral for trading F&O again. Read this exchange circular for more.

To learn more about the Quarterly settlement and its impact, read this article on Z-connect.

Note: If you transfer money back into your trading account within 3 Days, we will refund the payment gateway charges.