Market regulator SEBI has eased settlement norms for brokerage accounts inactive for over 30 days to streamline operations and reduce procedural burdens for brokers. Funds from such accounts will now be returned on the next scheduled monthly settlement date, as specified in stock exchanges’ annual calendars.

Previously, brokers were required to return funds within three working days of identifying inactivity. The Brokers’ Industry Standards Forum (ISF) had raised concerns over the operational challenges posed by this requirement, despite client funds being securely held by clearing corporations.

According to SEBI’s circular, if a client hasn’t traded in 30 calendar days and holds a credit balance, their funds will now be settled on the upcoming monthly settlement date, regardless of whether they opted for a monthly or quarterly cycle.

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SEBI clarified that if an inactive client resumes trading before the monthly settlement date, their funds will be handled according to their chosen settlement preference. “The settlement of accounts shall continue as per the client’s preference for quarterly or monthly cycles,” SEBI stated.

The revised norms, effective immediately, mandate stock exchanges to inform members, update regulations, and ensure compliance.