Cash Margin Shortfall

At Angel One, we constantly strive to provide our clients with the best trading experience while ensuring financial stability and compliance with regulatory guidelines. In line with the same, we are implementing some changes regarding how margin is managed.

SEBI's Margin Rules:

According to the regulations effective May 2022, brokers have to ensure that a minimum of 50% of the total margin required from a client is in the form of cash or cash equivalents. The remaining 50% of the margin can be in the form of pledged securities or cash equivalents or cash. This change was made with a view to ensure better risk management and financial stability in the market.

Key Changes:

Cash Contribution for Margin:

Starting from July 15, 2024, clients will be charged an interest rate of 0.0342% per day on any cash or cash equivalent margin shortfall in their accounts in excess of 10 lakhs.

Note: If Angel One provides the cash component for your margin and it exceeds ₹10 lakhs, a 0.0342% per day will be charged on the amount above ₹10 lakhs only.

Detailed Explanation:

New System:

50-50 Split:

As per SEBI regulations, only 50% of the margin can come from pledged non-cash securities, and the remaining 50% must be in cash or cash equivalent securities.

Interest Charges:

If Angel One provides the cash or cash equivalent component for your margin, we will charge interest at the rate of 0.0342% per day on this amount.

Interest on Peak Margin Shortfall:

Interest will be charged on the peak margin shortfall during the trading day. This means that in case there was a margin shortfall anytime during the trading day, even though you may have squared off your position by the end of the day, you will be charged interest for the peak margin shortfall that occurred during the day. This is based on peak margin utilisation, which helps ensure that adequate funds are available to cover all positions throughout the trading session.

Example:

If your total margin requirement is ₹25,00,000 on your trade, you need a minimum of ₹12,50,000 in cash or cash equivalents (Ledger cash, Liquid Bees, Certain Debt Mutual Funds etc). You can contribute the remaining ₹12,50,000 in pledged securities and/or cash equivalents. If the cash or cash equivalent available in your account is less than ₹12,50,000, you will be charged interest on the remaining amount in excess of ₹10,00,000 of cash shortfall that is provided by Angel One.

Interest Calculation for 4 Days with Exceeded Cash Margin:

Breakdown of Cash Margin Shortfall:

Note: The interest is calculated only for the days with margin shortfall where Angel One's contribution exceeds ₹10 lakhs. This ensures that clients are charged interest only for the excess amount and days with actual shortfall. Interest will be posted in ledger Bi-monthly and will be debited from the ledger account only.

Benefits of the New System:

Ensures that clients maintain a balanced and responsible approach to trading by having a mix of cash / cash equivalents and pledged non cash securities.

Reduces the risk of over-leveraging and promotes market stability.

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