Why your broker must "upstream" every rupee before bedtime

We walk you through the complete progression of events that will lead to the implementation of the upstream framework. 1. Where did this come from? Ever since the Karvy scandal revealed how easily a broker can access client money, SEBI has spent five years eliminating every last escape hatch. The final bolt is the daily upstreaming rule: whatever cash (or cash equivalents) is still sitting in a broker’s client ledger after trade settlement must be sent to the clearing corporation (CC) that very night. The basic principle was outlined in a circular dated 30 June 2023, with implementation details to follow. 2. How does the sweep work? Step New account-plumbing What actually moves 1 Client funds first land in an Up-Streaming Client Nodal Bank Account (USCNBA) held by the broker. Cash, a lien-marked fixed deposit, or a pledged unit of an overnight mutual fund scheme. 2 At the end of the day, the broker “upstreams” those balances to the CC. CC credits the margin back to the broker, allowing trading to continue the next morning. 3 Any money the broker owes the client is paid only out of a separate Downstreaming Client Nodal Bank Account (DSCNBA). This hard break prevents the co-mingling of client and prop cash. To make the mutual-fund leg work, SEBI pushed the redemption cut-off for ove