Changes in Stock+

Wednesday, 23 February 2022

SEBI has come out with Segregation of collateral at client level to minimize risk with respect to client funds lying with the Broker.

Circular calls for "Reporting of Client funds" ( collateral ) and allocation of collateral to the client on a daily basis which brokers have started doing from Dec 15th. Further clients are required to maintain minimum 50% collateral in the form of cash when availing margin benefit against shares pledged in their depositories or the same would be adjusted from brokers proprietary capital. Please go through circular for more details

Requirement of minimum 50% collateral in form of cash for Stock Plus Clients. 

From Feb 28th, 2022 Stock + clients are now required to maintain a minimum 50% of the total collateral in the form of cash. If margin is utilized and 50:50 cash vs collateral ratio not maintained then late payment charges @ 18% per annum would be applicable on the shortage amount of cash calculated on day to day basis

Example 
eg . Say you have a cash margin of 50,000 and shares worth 2 lac. Considering a haircut of 25% the collateral value comes out to be 1.5 lac. If you use 1 lac total margin ( 50,000 cash + 50,000 collateral ) 50:50 cash vs collateral criterion is fulfilled. If you use margin beyond that then Interest would be applicable on only cash amount that is short in order to meet the 50:50 cash vs collateral ratio

Check out ET coverage on this here 


Comments

 
No comments.
 

Post a comment


You can use the following HTML tags: <a><br><strong><b><em><i><blockquote><pre><code><ul><ol><li><del>


CAPTCHA Image
Reload Image


Open an SAS Online Account

Get started today to really enjoy your trading experience. Fill in your details, connect your bank account & upload your documents.

Open Trading Account