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Home > Support > Policies and Compliance > Client MTF Policy

Client MTF Policy

From Sep 1st, 2020 as per SEBI Circular all collateral and funded stock can only be held by way of margin pledge.

How to pledge shares to avail collateral as per new margin pledge mechanism

Once you buy shares in NRML under equity plus, as per circular collateral stock and the funded stock would be required to be held by way of margin pledge in your DP account itself. The fully paid shares would be collateral stock and value of shares equal to the debit amount would be called funded stock.

Eg If you fund your account with 1 lac and buy shares worth 4 lac under Equity Plus, 1 lac worth fully paid shares would be marked under Collateral Pledge and 3 lac funded stock would be marked under MTF Pledge.

We will be initiating two pledge requests from our end, one for collateral stock and other for funded stock and you would be required to approve the same via OTP mechanism. Please note once shares are purchased under MTF we will be initiating the pledge requests on T day itself and the same would have to be approved failing which further buying in your account will be restricted from T+3 and we will have to liquidate your funded stock as per SEBI norms by T+5 post 2:30 pm.

 

* Pledge requests initiated by SAS Online on T day itself

* Delivery of collateral and funded stock from exchange T+2

* Further position not allowed from T+3 if requests not approved

* Liquidation of securities on T+5 post 2:30 pm if pledge not approved via OTP ( Weekends / Trading Holidays will not be counted while calculating T+5 )

 Also note to get delivery limits in your account under EQ+ you will be required to approve pledge requests against collateral stock bought in your account though your account may be in credit.

Example: - You transfer 5 lac to Trading account and buy delivery worth 5 lac . We will mark this 5 lac also as collateral stock though your account is not in negative and send you a pledge request. This way your delivery limit will be open and you will be able to buy delivery upto 4X the total amount which in this case is upto 20 lac. If you don't approve the pledge request you won't be able to buy further delivery in your account as the limit will be zero.

BTST will not be allowed in MTF as upfront margin will be short.

Example:- Let's say you Buy a stock on Monday for Rs 100/- a margin of Rs 20/- (20% of the transaction value) will be levied in your account until pay in of funds done to exchange on T+2 and when you sell the same stock on Tuesday (we generally do Early pay in so that no margin is levied) but since your stock will be credited on Wednesday to your account we do not have stocks for doing early pay in to avoid sell margin. In this case a sell margin of Rs 20 /- (20% of the transaction value) will be levied in your account so in total Rs 40 /- will be blocked as margin which is 40% of the transaction value but since you have purchased in Equity Plus you have only 25%( if you purchase any stock on which leverage is 4X) of the transaction value and remaining is funded by SAS Online now since margin levied is 40% and actual funds available is 25% the difference 15% is reported as short margin to exchange and penalties are levied accordingly.

Please note: -

● If client does not authorize pledge requests on T day via OTP then the benefit of collateral will cease to exist from T+3 beginning of day and client won't be able to take further position

● Margin penalty may be levied in case non-authorization of pledge requests leads to shortage of margin on T+2

● Clients can check pledge requests from given Link by entering PAN and approve via OTP.


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