Regulatory changes to Client Unpaid Securities Pledgee Account (CUSPA)

We would like to bring to your attention the changes that will be in force regarding clients’ unpaid securities in accordance with a SEBI circular. Starting from 01-Apr-2023, unpaid securities belonging to clients will be auto-pledged in the client’s demat account. The securities that have not been paid in full by the client shall be transferred to the respective client’s demat account, followed by the creation of an auto-pledge without any specific instruction from the client.

Let’s understand this with an example:

If a client has purchased shares on a Monday (Trade day) and if Tuesday is the Settlement date, either one of the two things can happen on Tuesday:

a. If the Net Available Balance is Credit, then the payout will be released in the client’s account.

b. If the Net Available Balance is Debit, then the equivalent quantity will be auto-pledged.

Note: The Net Available Balance will be considered of T day EOD while releasing the shares payout in client account or in CUSPA account on T+1 day. If the outstanding dues are not cleared within Trade + 5 days, then Angel One will liquidate the shares as per RMS policy.

The following changes will occur due to this new process:

  • There will be no trading exposure & margin benefit on the CUSPA auto-pledged shares.
  • All corporate actions benefit, such as split, bonus, and dividend, will be directly credited to your trading & demat account. This will provide transparency of the securities held in the client account.
  • The pledge and unpledge charges will be levied on your trading account based on the auto-pledged shares transferred in CUSPA. The pledge and unpledge charges are levied based on per ISIN per day at Rs.20 + GST.
  • To make early pay-in/pay-out to the Exchange, a regular demat transaction charge of Rs. 20 + GST will be applicable per transaction/ISIN when securities are sold.
  • Refer: SEBI Circular

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