Brokers cannot pledge clients’ Demat holdings without their knowledge anymore.
Demat holders/clients will have to pledge/un-pledge directly.
The brokerage industry asked for an extension of timelines citing operational challenges to implement the changes on such short notice, SEBI refused to oblige.
For those who are not aware, until now the process of pledging, getting margins against your Demat holdings was pretty much opaque and under the broker’s control with little to no transparency.
If your holdings are already pledged as on 31st August, read this notice.
From customer safety perspective, it is very positive move. There will be no more concept of pooled account, using client’s securities using POA, etc. This will definitely prevent Karvy kind of incidents in the future
You are right @tejas_khoday . There was limited transparency till date. Each broker has their own margin policy (some accept liquid funds, some do not, some insist on 50-50 cash balance etc.). This measure should bring in some standardization
I am not sure how much of an operational effort this is for brokers. It may create issues for a few days, but it is a step in the right direction definitely
I am not sure how much of an operational effort this is for brokers. It may create issues for a few days, but it is a step in the right direction definitely
All pledged holdings will have to be unpledged.
Re-pledged (This is cumbersome, troublesome) on a case by case basis.
Impact on the market. The quantum of pledged securities is large.
How does the pledging process work in Fyers web or BO? Please explain or point to the latest documents. If I want to pledge 50% value of all my holding by default, how can I do it?
I wonder how the intraday trades get affected from now on. Is it true that from December onwards, even cash market intraday leverages will be drastically reduced? So I am assuming it is the end of BO/ CO as a service?
Thanks! 5x is reasonable enough. But I feel that there will be a significant loss of liquidity in the market. Even in the cash markets.
Personal opinion - I do not like the fact I need to maintain upfront margins to sell my own stocks! Can’t do anything about it I guess after SEBI runs it by.
Step 1 - You’ll need to send a pledge request to [email protected] with scrip details & quantities.
Step 2 - Our support team will process it within 30 minutes (Client should request for pledge before 3:30 PM on working days. Requests after 3:30 PM will be considered on the next working day).
Step 3 - You will have to authorize the pledge by visiting the link that you will receive on the registered Email ID/mobile number - By clicking the received link, you will be redirected to CDSL’s (DP) portal where you are required to mention your PAN or Demat account number and generate OTP to authenticate the margin pledge by entering the OTP received on the registered Email ID/mobile number.
Step 4 - Pledge will be created in the next 24 hours.
If we want to sell the pledge holdings again the same Process ? Means I cannot sell it immediately whenever possible based on market movement with no time delay ?
Obviously you’ll have to un-pledge before selling your pledged securities. Imagine if we allow you to sell pledged holdings without un-pledging. You’ll have free margin money funded by the brokers to speculate, right?
I’d like to know how these new rules will affect traders who work on the BTST strategy.
Few questions. Would be grateful if you can answer them.
From what I read, if I buy INR 100 rupees worth of shares today, I can sell it only after T+2 (after I get delivery in my DEMAT account). Is that correct?
And at the time of selling, I need to have INR 20 in my balance (20% margin)?
After selling the shares, when does the money get credited to my account?
On the same day or the next day?
This technically means between trading (buy+sell) of two different stocks, there will be a minimum gap of 3 to 4 days. Is that correct?
One thing I have been unclear about however is the impact on options trades. I am an options buyer mainly. So how does it impact somebody like me? Would be thankful if you can clarify please. Will be great help too!
Hi @45JsayC50X, You’ll have to pay a 100% upfront margin to purchase stock so it will impact BTST trading.
No, you can sell it on the same day. There is no such restriction. You will need to have the required 20% margins, that’s about it.
If you’re selling delivery holdings, you have already paid 100% upfront margins (We collect full margins for overnight trades). So you don’t have to pay an additional 20% when selling. However, if it is an intraday trade, you will have to pay 20% on each side (Buy/sell).
Yes, if you sell your holdings, it will get credited to your account. You can use the amount for trading in equity or F&O.