SEBI put in place a framework for pledging of client stocks within the client's DP by way of pledge to minimize the risk of misuse of client’s shares available with the Broker. Further to that SEBI has come out with Segregation of collateral at client level to minimize risk with respect to client funds lying with the Broker.
We shall keep you informed regarding various points related to the circular as for now various aspects and their implementations are still under discussion with SEBI. However, based on initial feedback we need to make a few changes in order to be compliant.
Shifting to accounting based on Settlement instead of Trade Date
Currently, for client convenience, we were doing the accounting on Trade Date which means credit for MTM profit or proceeds from the sale of shares/ option premium was given on the same day and the client could use the funds to create fresh positions immediately or take payout also.
Payout once trades settled by the exchange
From Jan 17th we would be shifting to accounting on settlement date which means entries pertaining to MTM or sale of shares would be posted as per settlement date ie. T+1 in FO segment and T+2 in cash segment. Sale proceeds from holdings can still be used to take new positions immediately but payout can be taken only once trade is settled by the exchange. This is because we do Early payin of shares sold by our clients on same day post trading hours, so the full value of shares sold is available to you for taking up fresh positions immediately in the trading system.
MTM profit credit on T+1 for FO and T+2 for cash segment
Intraday MTM profit will now be credited as per the settlement date and you will be able to use it only after the same is settled by the exchange ie. T+1 in FO segment and T+2 in cash segment. Say if you trade intraday in Futures on Monday, the MTM profit would be credited to your account on Tuesday. In the Cash segment, the MTM would only be credited by Wednesday so you may use the MTM credit only on Wednesday
Option sell credit can be used only to buy options on the same trading day
Say you carry forward an option buy position on a particular day. Sale proceeds from squaring off that buy position can only be used towards a new option buy position on the same trading day that too in the same segment ( Like proceeds from equity options can be used for option buy in equity segment/currency options only in currency segment ) . These can only be used for any other position ( Fresh option sell , Buying in Cash or Futures trading ) on the next trading day
No Credit on BTST Trades w.e.f 17th June 2022
15 June 2022
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