Announcements

As per SEBI’s recent guidelines, there has been an update on the way margins are reported from 1st December 2020. You can read more about this on our blog here.

This change has an impact on your current funding process done via Smart Transfer, as brokers are required to report peak margin exposure of all customers to the exchange at multiple points throughout the day. And to comply with this regulatory change, we are making a few changes to the current Smart Transfer process.

What is the current process?
As per the current process, IndusInd Bank (IBL) only transfers the funds that are to be debited from your account i.e the funds that you have used towards trading.

What is the change in the process?
Starting 1st December, 2020, as per SEBI regulation, IBL is required to transfer the amount equivalent to the highest (peak) margin being used by you during the day instead of the amount that you use towards executing trades.

As a result, IBL shall transfer the entire amount to your Upstox account that you marked out for trading using Smart Transfer on that particular day. This amount will stay in your Upstox trading account unless you do place a withdrawal request to transfer that amount back to your IBL account.  Please note that you will not be earning interest on the amount that stays in your Upstox trading account during this period. However, you will continue to earn interest on the amount that remains in your IBL account.

For example: You’ve transferred Rs. 5 lakhs from your IBL account to your Upstox account via Smart Transfer. Let’s say you choose to invest Rs. 1 lakh towards purchasing some stocks. At the end of the day, the net debit in your ledger would amount to Rs. 1.1 lakh (after considering taxes). Prior to the new guidelines, we would have debited Rs 1.1 lakh from your IBL account. But as of now, we shall debit the entire sum of Rs. 5 lakhs irrespective of whether or not you have actually executed trades using this amount. The unused Rs. 3.9 lakhs will remain in your Upstox trading account, until you place a withdrawal request to transfer this back to your IBL account.

What could you do?
You could allocate (keep aside) only the amount, which you plan to use for trading on that day from your IBL account. But don’t worry! The unused amount that you transfer to your Upstox trading account from your IBL account from one particular trading day will remain in your Upstox wallet which you can use for trading in the next trading session.

Rest assured, we are working towards a solution to ensure that we can transition back to the system of debiting only the amount from your IBL account that you use for trading. Stay tuned for more updates.

If you have any questions or concerns regarding this change, please feel free to reach out to us by raising a ticket on our mobile or web platforms.