Announcements

The third phase of Peak Margins as prescribed by SEBI here will be effective from 1st June 2021. This means in order to offer Intraday trading across various products brokers need to collect a minimum of 75% of funds on the prescribed limit from 1st June 2021.

You can learn about our updated margins here.

What are Peak Margins?
Before 1st December 2020, brokers could provide higher leverages by offering products like Intraday (MIS), Cover Order (CO), and Bracket Order (OCO) as margins would only be applicable in case a position is carried forward.

However, in the interest of the market and to bring in more stability, SEBI mandated all brokers to collect minimum funds from customers even for the Intraday positions. This means traders can take Intraday positions only after fulfilling this minimum margin requirement. SEBI also asked clearing members and clearing corporations to monitor brokers’ margin activities from 1st December 2020.

The changes as per these guidelines are being rolled out in phases.

In the previous phase which was effective from 1st March 2021,  brokers had to collect a minimum of 50% funds on the prescribed limit from customers. And now in the next phase which will be effective from 1st June 2021, brokers have to collect a minimum of 75% funds on the prescribed limit from customers.

You can read more about it here.

How does this affect intraday traders?
As per SEBI guidelines, brokers have to collect a minimum of 75% funds on the prescribed limit on Intraday trading offered across various products. Margin applicable on the intraday positions would be:

1. Equity: 75% on applicable VAR + ELM OR 20% of trade value

2. Futures and Option (writing): 75% on SPAN + Exposure margin

Stay tuned for important updates from Upstox! 

We are conducting a scheduled upgrade & maintenance activity today, 29th May'21 untill 12.00 PM to ensure that you can enjoy a seamless trading experience on Upstox. During this time you may not be able to login to the Upstox mobile app & desktop platform. Thank you for your patience.

Vikas Lifecare Ltd. has credited existing shareholders’ Demat accounts with REs (Rights Entitlements) after it announced a Rights Issue.

What does this mean?
A company announces a Rights Issue to invite existing shareholders to buy more shares, usually at a discounted price. These shares are known as Rights Shares.

After the Rights Issue is announced, the company then credits its existing shareholders’ Demat Accounts with REs (Rights Entitlements).

These REs are not the Right Shares but the benefit given to existing shareholders to apply for the Right Shares. If shareholders do not wish to apply for these Rights Shares, they can even trade these REs in the market until a particular date.

To learn more about rights, click here.

What does this mean for Vikas Lifecare Ltd. shareholders?
Existing shareholders of Vikas Lifecare Ltd. (as on record date 21st May 2021) have two options - 

1. They can use their REs to apply for more shares of Vikas Lifecare Ltd. (in proportion to their existing shares - 2 for every 5 shares held) at a price of Rs.1.85  per share.
2. If they do not wish to apply for more shares, they can even trade their REs in the market.

Please note: REs only give you the right to participate in the ongoing Rights Issue of a company. This means using these REs you can make an application for Rights Shares with necessary application money or renounce the REs before the issue closes.

REs which are neither subscribed by making an application with requisite application money nor renounced, on or before the Issue closing date shall lapse and shall be extinguished after the Issue closing date

What dates should one keep in mind?
First and Last date to apply for Rights Shares:  27th May 2021 - 10th June 2021
If you’re interested in applying for the right shares, you can apply on or between these dates.
Last date to trade your Rights Entitlement: 7th June 2021
If you do not wish to apply for the rights shares, you can trade your REs in the market on or before this date.

How To Apply for Rights Shares?
There are 3 ways to apply -
1) Online through ASBA (Applications Supported by Blocked Amount) if your bank supports it just like you do for an IPO.
2) Online through the RTA (Registrar and Transfer Agent) website 
3) Offline by filling the Composite Application Form (CAF) received in your courier from the company’s RTA and then submitting it at a Self Certified Syndicate Banks (SCSBs) branch.

All open position(s) in the F&O segment with a 27-05-2021 expiry date (except those who have opted for physical settlement) should be squared off  before 12:00 PM on 27th May 2021 to avoid any further action by Upstox.

What does this mean?
In an F&O contract, when there is an open position that has not been squared off by its expiry date, physical settlement takes place. This implies the physical delivery of stocks to settle the open transactions instead of settling them with cash.

Here’s an example – A trader bought futures for XYZ (lot size – 5000) at Rs. 100, so the contract value is Rs. 5,00,000. On expiry day, if the settlement price for XYZ is Rs. 102 and the contract has been settled on a cash basis, the trader will get a profit of Rs. 10,000. If the contract has not been settled, physical settlement takes place, which means the trader will have to pay an amount of Rs. 5,10,000 (as per settlement price of Rs.102, lot size 5000) and 5000 shares will be delivered to his Demat account as per the T+2 days settlement cycle.

As per our latest announcement mentioned here, we require consent in order to physically settle your transactions.

However, for all users who have not submitted consent and who do not square-off their positions before 12:00 PM on 27th May 2021, then here’s what will happen:

A) Auto-square off by Upstox:

If users cannot square off your positions before the cut-off time (i.e., 12 PM on 27th May 2021), we will square them off at the prevailing market rates. Such square-off orders will be placed by our team as “Market Orders” and since order matching happens at the Exchange level, we shall not be liable for the rate at which they are executed.

B) Physical settlement by the Exchange:

If we cannot square off your positions due to market operational reasons, positions will be physically settled by the Exchange, and you will have to bear the costs (penalties & losses) arising from it. This means -

1. For a long open position (Long Futures, Long Call Options, Short Put Options)
   Your long open position will get converted into a ‘Buy Equity Delivery,’ and you will be liable to pay the entire settlement amount as the holder of the position.
2. For a short open position (Short Futures, Short Call Options, Long Put Options)
   Your short position will get converted into a ‘Sell Equity Delivery,’ and you as a holder of the position will be liable to deliver the shares; else, an auction process will be applicable.

To avoid this entire process, we recommend squaring off all open F&O trades before 12 PM on 27th May 2021.

Feel free to refer to the exchange’ circular  here.

Tomorrow, 26th May 2021 is a settlement holiday on account of Buddha Purnima. Due to this, all Equity Delivery orders placed on 25th May and 26th May 2021 will reflect in your Demat account on Friday 28th May 2021.

To help you understand what this means, we’ve simplified the details below.

What’s a settlement holiday?
Settlement holidays are when markets are open but settlement of your trades do not take place as per the usual T+2 cycle because either the depositaries (NSDL and CDSL) or banks are closed on that day.

How does this holiday impact your trades?
Since the settlement date denotes the final transfer of ownership of shares and not the day you made the trade, a holiday in between causes a delay in the final transfer of shares.

What will be the impact of the Settlement Holiday on 26th May 2021?
On account of the settlement holiday on 26th May 2021 kindly note the following impact on your holdings:

1. All trades placed on 25th and 26th May in the Equity segment will be settled on Friday, 28th May 2021. 
2. All trades placed on 25th May in the Derivative segment will be settled on 27th May
3. All shares bought on 25th May will be visible under T1 holdings on the 26th May but you will only be able to sell them on 27th May.
4. The credit bill amount for all segments on 25th May will not be available for trading or withdrawal purposes on 26th May because this amount will be blocked for one day due to the settlement holiday.

You can also check a list of future settlement holidays here.

If you have any queries, you can raise a ticket on the Upstox Mobile or Desktop app.

Happy Trading,
Team Upstox.