What is Running Account Settlement?

Running Account Settlement is the process by which the credit balance in your trading account is settled periodically, usually at the end of each quarter. The settlement ensures that any unutilized funds in your trading account are returned to your linked bank account, unless they are required for ongoing or upcoming trades.

When Does Settlement Occur?

• Without Open Positions: If you do not have any open positions, the entire amount lying as a credit in your ledger as of the end of the first Friday of a calendar quarter will be settled and transferred back to your bank account.

• With Open Positions: If you have an outstanding position on the first Friday of the month/quarter when the settlement of the running account of funds is scheduled, the funds retained in your trading account are calculated as follows:

  1. Pay-In Obligation: The entire pay-in obligation of funds outstanding at the end of the day on the settlement date, across all segments, will be retained.

  2. Cash Margin: 50% of the end-of-the-day (EOD) margin requirement as cash margin will be retained, excluding the margin on consolidated crystallized obligations/MTM (Mark-to-Market).

  3. Additional Margin: Beyond the 50% cash margin mentioned above, 225% of the EOD margin (which includes an additional 125% margin) will be retained. This amount is reduced by the value of securities (after applying the appropriate haircut) that have been pledged as collateral through the Depository system and the value of commodities (after applying the appropriate haircut).

How is the Margin Liability Calculated?

• The margin liability includes the EOD margin requirement in all segments across exchanges, excluding the consolidated crystallized obligation/MTM margin.

• The margin liability may also include additional margins collected by the broker from their clients as per the risk management policy, which is communicated to the clients.