New SEBI Regulations, Changes in margin requirements & Pledge from Sep 1, 2020

SEBI, the regulator of Indian Stock Markets, has made two major regulatory changes from September 1, 2020:
• Upfront margin requirements for Equities and F&O across NSE, BSE, MCX, NCDEX
• The method of pledging & Re-pledging of stocks for additional Collateral Margins

What is new Margin System?
• Upfront margin requirement for all buy and sell trades.
For e.g.: In capital segment, Trading Members (TM) are required to mandatorily collect VaR +ELM (not less than 20%) margins from the clients on an upfront before execution of trades.
• MTM & Other margins can be deposited by T+1 day for Derivatives and T+2 day for Equity. Shortfall, if any, shall be liable to penalties.

What is New Pledging Mechanism?
Until now your broker was providing you the collateral margin for trading, by moving the stocks from your Demat account to Broker’s pool account and in turn to the clearing corporation. From September 1, 2020 onwards, stocks will remain in your Demat account and you can create a pledge in favour of your broker and which in turn can re-pledge to the clearing corporation to avail the benefits of limits/margin.
Over the past few weeks, we have made changes in our Trading apps (Web & Mobile) with new features as Margin against Holding under Funds section. Secondly, we have released all securities from pool account to the customer Demat account and requested the customers to repledged those securities using the new mechanism.

Will the profit earned from intraday trading be available on T-day or T+1 day?
No, profits made from intraday trading will be available for further trade only after settlement done by exchange. For Derivatives it will be T+1 and for Equity it will be T+2

When would the MTM profit be available from selling Futures Position?
For trades related to MTM, profits made by selling the Futures position will be available after settlement by exchange on T+1

Can I use Option sell credit to buy options on the same trading day?
When you exit your long/buy option positions or enter new write/short options, the proceeds or credit of option premium can be used for only new long/buy option trades on the same trading day and only within the same segment. However, the proceeds or credit of option premium can be used to trade for any other segment like equity or currency or commodities only after settlement by exchange.

Can I still do BTST(Buy Today Sell Tomorrow) trades?
Yes, you can sell your stock on T+1. But the proceeds from sell trade cannot be used for further transactions on T+2.

How much time does it take to update Limit/Margin after successfully completing the Pledge process?
It takes around 15-30 minutes for Limit/Margin to update after successfully completing the Pledge process at CDSL.

Where can I see the Pledge shares for my account?
On Mobile and Web app: Go to Funds – Margin against Holding – Withdraw

What are the charges for Margin pledge, unpledge and invocation charges?
Rs. 50/ + GST - per ISIN for Basic Service Demat Account (BSDA) clients
Rs. 20/ + GST - per ISIN for Non-BSDA clients

Can excess margin/collateral available in MTF ledgers be considered towards Margins of non-MTF transactions?
Excess margin/collateral available in MTF ledgers cannot be considered towards Margins of non-MTF transactions.

How to avoid penalties?
It is advised that you Pledge stocks of sufficient amount or maintain a sufficient balance in your trading account to avoid any penalties.

If you have any issues just contact our customer care team, they will help you with the process:
022-68071111 / 022-42185454

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