As per SEBI’s latest circular, all brokers need to settle the accounts of all clients on the first Friday of every quarter i.e. October 2022, January 2023, April 2023, July 2023, and so on. If the first Friday is a trading holiday, then such settlement shall happen on the previous trading day which is Thursday.


Note: Any funds debited from your Upstox trading account due to monthly or quarterly settlement will be credited to your primary bank account by 3:00 PM on the next working day. We request you to kindly wait for the specified turnaround time (TAT).


According to SEBI's mandate, all stockbrokers must settle client accounts every 30 or 90 days. To meet this requirement, any free balance will be credited to your registered primary bank account.


The settlement of funds and securities through quarterly settlement is an initiative by SEBI to safeguard the interests of investors and traders. SEBI mandates all stockbrokers to return unutilized fund balances in clients' trading accounts to their primary bank accounts.

Free balance refers to the amount remaining unutilized with the stockbroker after accounting for:

  • Any upcoming funds pay-in obligations to the exchange for trades executed.
  • 225% of the margin requirement, adjusted for any stocks pledged as of the settlement date.

If a customer has not traded within the previous 30 days, their fund balance will be credited back to their registered primary bank account.

For more details, refer to the SEBI circulars on Securities and Commodities accounts:

Example:

  • Assume you have ₹1 lakh in your account and have taken 3 lots of Nifty options (assume the margin for one lot of Nifty is ₹27,000), then  ₹81,000 would be blocked from your account leaving you with a balance of ₹19,000.
  • The Exchange allows a broker to block 2.25 times the margin it levies for the open position held by the client and after blocking this 2.25 times margin if there is any credit, it needs to be reversed.
  • In the above example, 2.25 times ₹81,000 would be ₹1,82,250. Since the funds available in your account are only ₹1 lakh the broker need not make any refund and will mark your account as 'retained'. Once the broker marks your account as retained, he is required to send you a statement explaining the basis for such retention.
  • However, after applying the 2.25 margin rule, if there is any credit standing in your account, such funds will have to be reversed to your bank account.


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