Hi Traders,
How do you avoid quarterly settlement ?
From this post, i understand it is mandated by SEBI.
It is an inconvenience to transfer money from bank account to trading account.
Is there any way to avoid it ?
Also, What is the reason for quarterly settlement ?
I do not see a convincing reason for this ritual as a trader/account holder…
Thanks in advance.
This is done so that the broker doesnt use the funds to trade in his account. It is an initiative by SEBI to protect the interests of investors and traders.
I understand your concern I too feel that that there should be an option for a client to select this option
There can be a some sort of a pop up that can be raised for the client as on a particular date(quarterly settlement date) incase client selects NO it should be retained and if YES or no response it can be transferred to bank account.
@Zerodha-Staff @Meher_Smaran is there something like this you can recommend SEBI?
@JuhiMahiwal There’s currently no provision to retain funds, even with a consent. This is something that has come up often in discussions within the broker and trader community. That said, it’s a regulatory call.
I usually buy Liquidcase/liquidbees to avoid this and sell after 2 days. It earns some interest and no market risks.
Please do not avoid or attempt to avoid.
It would be preferable to allow it to occur and then transfer it back.
The inconvenience of transferring money back from your account is significantly less than the situation of having no funds in your account.
Well - it is a necro but you can avoid it by parking them in liquid ETFs a few days before settlement, and then sell the ETF after settlement date.
like? any example? and what about profit/loss and charges involved?
In case of delivery based trades with LIQUIDCASE, most significant fee is the DP charge of 35+GST. Other than that, the rest(STT/exchange fees, SEBI fees) would be an additional 20-30 for 1 lakh.
At 0.01% daily increase in P/L for a capital of 1lakh, you need to keep it for at least a week to breakeven.