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As per SEBI, your broker needs to transfer unutilised funds to your bank account on a monthly/quarterly basis. This is called as the Monthly/Quarterly payout. Read on to learn more.
Stockbrokers are required to periodically transfer all unused funds from a client’s trading account to their primary bank account. This is to prevent brokers from holding idle client funds. Read on to know more about the Monthly/Quarterly Payout.
What is Mandatory Settlement of Running account?
Before we learn what a Mandatory Settlement Payout is, we need to understand the Mandatory Settlement of Running account policy introduced by the Securities and Exchange Board of India (SEBI) in 2009.
According to this policy, your broker needs to transfer unutilised funds to the client’s bank account on a monthly/quarterly basis. This initiative by SEBI ensures higher security of traders funds and securities.
Kindly note that w.e.f. January 2024, the settlement of unutilised funds will take place on the first Saturday of every month (if you have chosen monthly settlement) or on the first Saturday of January, April, July, and October (if you have opted for quarterly settlement).
As per the circular effective from January 2024, brokers can settle the running account of clients on the first Friday and/or Saturday of the quarter or month.
However, due to exchange and banking holidays in certain months during FY2026–27, settlement dates may fall later in the month instead of the first Saturday. Therefore, the actual settlement date may vary depending on operational holidays announced by the exchanges and banks. The updated settlement calendar is published by the National Stock Exchange of India each year.
Below is the Running Account Settlement Calendar for FY 2026–27 based on the NSE circular.
Quarterly Settlement Calendar (FY 2026–27)
| Quarter | Period | Settlement Dates | Day |
| Q1 | April – June | 17th &/or 18th April 2026 | Friday &/or Saturday |
| Q2 | July – September | 3rd &/or 4th July 2026 | Friday &/or Saturday |
| Q3 | October – December | 16th &/or 17th October 2026 | Friday &/or Saturday |
| Q4 | January – March | 1st &/or 2nd January 2027 | Friday &/or Saturday |
Monthly Settlement Calendar (FY 2026–27)
| Quarter | Month | Settlement Dates | Day |
| Q1 | April | 17th &/or 18th April 2026 | Friday &/or Saturday |
| Q1 | May | 15th &/or 16th May 2026 | Friday &/or Saturday |
| Q1 | June | 5th &/or 6th June 2026 | Friday &/or Saturday |
| Q2 | July | 3rd &/or 4th July 2026 | Friday &/or Saturday |
| Q2 | August | 7th &/or 8th August 2026 | Friday &/or Saturday |
| Q2 | September | 4th &/or 5th September 2026 | Friday &/or Saturday |
| Q3 | October | 16th &/or 17th October 2026 | Friday &/or Saturday |
| Q3 | November | 6th &/or 7th November 2026 | Friday &/or Saturday |
| Q3 | December | 4th &/or 5th December 2026 | Friday &/or Saturday |
| Q4 | January | 1st &/or 2nd January 2027 | Friday &/or Saturday |
| Q4 | February | 5th &/or 6th February 2027 | Friday &/or Saturday |
| Q4 | March | 5th &/or 6th March 2027 | Friday &/or Saturday |
As per the circular effective from October 2022, below are the main points of SEBI’s guidelines:
- If your trading account balance is more than zero on the date of settlement, then the entire amount will be credited to your bank account.
- If your trading account balance is more than zero on the date of settlement and no transaction (trading activity) in 30 days, then the funds will be flushed out in a monthly settlement period.
- If you are having any margin requirement on the settlement date, your broker will block an additional 125% (Total 225% = 100%+125%) margin against holdings (pledged securities) after retaining 50% required margin from available cash. After that if there is any shortfall in the margin, then more funds will be retained up to Total requirement of 225% amount, and any excess funds will be reversed to your account.
- All accrual charges/debit charges will be retained, and funds will be credited to your account after deduction.
What is the SEBI Mandatory Settlement of Running Accounts ?
You will receive your Mandatory Settlement Payout Report on your registered email ID as and when the settlement happens. This report contains all the details of funds transferred to your account or retained by the broker on the settlement date. Below are the few things that this report summarizes:
- Value of funds and securities available and retained
- Details of payout
- Amount not required to be returned
Let’s go over the key details .
1. The total value of funds and securities available
This section contains the balance of your funds and securities as of the date of this statement. Unencumbered balance is calculated after adjusting the value of unsettled balances in trade day billing and required margin amount. Apart from this, it also contains details of the value of securities available for trade on T day (Trading day).
2. Explanation regarding retention of funds
Before we discuss what this section of the report contains you should know when the funds need to be retained. According to SEBI, the broker needs to block an additional 125% (Total 225 = 100+125) margin.
Let’s understand this with an example: Say, you have ₹1,50,000 in your account and have taken four lots of security X with a required margin of ₹25,000 per lot. So, ₹1,00,000 would be blocked from your account, leaving a balance of ₹50,000. As per the rules, the broker can maintain a 225% of required exchange margin for the open position held by you.
In this example, you need to maintain the total margin of ₹2,25,000 (1,00,000*225%). As the fund available in your account is only ₹1,50,000, your account will be marked as retained, and the broker will not refund any amount to your account. This part of the report gives you the details of the debit balance in your account (if any) and your funds and securities pay-in obligations on T and T+1 day for BSECM, NSECM, NSEFO, NSE Currency, and MCX Currency. Apart from it, this showcases a 225% margin requirement as per SEBI guidelines and the maximum funds that can be retained.
Retention of Funds
In this section, you will get the total value of the funds retained by your broker.
Details of Payout
This part contains details regarding the value of funds and securities released by your broker and credited to your account. In the above-mentioned example, let’s say you had a credit balance of Rs. 3,00,000 instead of 1,50,000. As per SEBI guidelines, your broker needs to maintain a balance of Rs. 2,25,000, which means you still have a credit balance of Rs. 75,000 in your account. In such a case, your broker needs to release this amount and credit it to your registered bank account.
Conclusion
Whether you trade regularly or not, knowing your funds and securities movement is important to make improved financial decisions. This report helps you get a detailed summary of the funds and securities retained and/or credited by your broker. It also showcases your fund’s pay-in obligations and the minimum margin you need to maintain in your account as required by SEBI as on the date of settlement. You will receive your Quarterly Payout Report on your registered email ID as and when the settlement happens.
