Changes in margin & the subsequent penalty applicable from 1st August 2020.
In addition to margin & related penalties applicable in the Derivative Segments, margin & related penalties shall also be applicable in the Equity Segment as well. This is in pursuant to SEBI circular SEBI Circular CIR/HO/MIRSD/DOP/CIR/P/2019/139 dated 19th November 2019, SEBI Circular SEBI/HO/MIRSD/DOP/CIR/P/2020/61 dated 16th April 2020 and SEBI Circular SEBI/HO/MIRSD/DOP/CIR/P/2020/101 dated 19th June 2020.
Though margins are being levied by the exchange in the equity segment at client level since 1st January 2020, shortfalls, if any, are not subject to any penalty. However, in reference to the SEBI circular dated 19th June 2020, the provisions shall be applicable from 1st August 2020. So, similar to the regulations of the derivative segment, in case of margin shortfall in the equity segment, you shall be liable to pay a penalty.
Considering the above changes and to get you accustomed to the above regulations, we have reiterated what shall and shall not be considered towards the margin requirements, below. This shall be irrespective of the segment you trade in.
Accordingly, you will need to continue meeting requirements relating to depositing initial margins upfront on the trading day if you wish to trade in any of the registered segment/s.
The following shall be continued to be considered as Upfront Margin:
- Funds available in the trading ledger with Upstox
- Shares pledged* in favour of Upstox as collateral for Margin Purpose(Only for POA clients)
The following unsettled values, as per the current regulation, shall not be considered as upfront margin-
- Profits made from - intraday trades Or C/F Futures trades
- Net sell premium
- Credit from the selling of stock
Caution must be exercised while conducting below class of transactions as these may lead to manifolds of margin being applicable, considering the complexity of the transaction:
- Trading in stock liable to 100% margin
- Carrying out BTST trades (Being unsettled, margins are applicable for both the buy and sell side, even if the Net position is closed)
- Trading in scrips under ASM
The M-to-M losses can be deposited by you on up to T+1 day, within the timings as specified by Upstox from time-to-time. However, you will have to ensure that any shortfall in the upfront margin requirements are fulfilled by the end of the Trade day.
In case the above condition is not met and margin shortages are experienced, penalties will be levied in accordance with the exchange norms. You can read about the exchange’s penalty structure here.
Additionally, squaring-off of your open positions shall continue as per our RMS policy on best effort basis.
For queries/doubts reach us at 022-6130-9999 or drop an email at email@example.com
* A change is this system shall become applicable in the near future. Clients shall be appropriately informed about such change in advance.