Regarding quarterly settlement

In quarterly settlement, the pledged MFs and shares are getting Unpledged automatically so i am facing the below problems as a day trader

(i) As a day trader i cant use all the funds overnight so every three months once i have to face this issue
(ii) To pledge the shares again its taking around 2days, So can’t able to trade for those 2days
(iii) End up paying 60rs + GST per scrip for pledging every 3 months once

@nithin pls do something regarding this or give a pro tip to avoid quarterly settlement

If you suggest overnight FNO position at least one day in that quarter, Am i need to utilize 100% of the fund/ collateral margin for that trade?. I mean if i have 10L collateral margin what should be my minimum margin utilization for that trade

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The Quarterly settlement circular is applicable to both fund and securities. As such, if you haven’t used funds to the extent that your account gets settled by way of deemed settlement, then its compulsory for any broker, not just Zerodha to return such securities back to the client’s demat account. If a member doesn’t do that, he isn’t being compliant.

SEBI allows a member to retain upto 2.25 times the overnight margins and then if there’s excess a case to transfer securities back arises.

Example: You have pledged stocks for which you’re getting margins of Rs.10 lacs post haircut. Assume this is the only margins available, no cash in the account. On any given day, if you have overnight positions of more than 4.5 lacs, your account gets settled by way of deemed settlement, since 2.25 times 4.5 lacs is more than 10 lacs. If you haven’t used up margins, then as said earlier, the securities will have to be transferred back.

as per the above example if i use 4.5L for an overnight position for even one day in a quarter then i can get rid of quarterly settlements, Right?

any reply

We use an internal logic for the settlement of accounts. The day you receive your stock/funds back, is the day your account is considered settled. You would also receive a ‘Statement of retention’ and an ‘Account statement’ from us explaining the basis of such payout. Your account has to be settled once in 90 days, this is what SEBI has mandated. From the 45th day of the previous settlement up until the 80th day, if you use up the 4.5 lacs even for one day, then the account gets settled by way of deemed settlement. I know its a little tricky for you as a client to keep track of these dates, but the idea is not to take a trade in order to ‘avoid’ receiving funds/securities back. The Quarterly Settlement rule was brought about keeping the client’s interests in mind.

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Thats absolutely not true. Quarterly settlment is pure headeache to intraday traders and do no good to them. 90 days is huge time and if broker wants he can eat all the clients money in 90 hours. These policy makers thinks nothing before implementing policy ( this is true across all their departments). I bet there are many another Satyam, PNB out there and SEBi can do nothing to prevent these.
SEBI can only torture traders.