Announcements

Margin shortfall penalties are effective from 1st May 2021 onwards. This means Upstox will now pass on any Exchange-levied penalties arising out of a margin shortfall to clients.

While we had initially stated that this would be effective from 12th April 2021 onwards, we extended the deadline. Hence, if you’ve got margin shortfalls, kindly fund your account immediately on the trade day itself to avoid penalties.

What does this mean?
As you are aware, in order to comply with the Exchange and regulatory requirements, we are required to collect upfront margin from all clients. As a result, clients with insufficient margins will not be able to place an order with us upfront. 

However, there could be instances when margin requirements go up after clients enter into a trade or take any actions on their current Open position(s). In such instances, clients are required to add sufficient funds to their Trading account to fulfil the resulting margin shortfall (if any).

If sufficient funds are not added and it leads to a margin shortfall on the trading day (T day), then the margin penalty levied by the Exchange would be passed on to such clients (this will reflect in the client’s ledger). If the shortfall continues on T+1 day, subsequent action as per the Upstox risk policy would also be applicable.

What are the few instances when margin requirements could go up, that clients need to be aware about?
Here are few examples* when margin requirements could move up:

1. A leg of a hedged position squared off by client or a leg of hedged position expiring leading to an increase in margin requirement.
2. While the margin rate remains the same, an increase in price leads to an increase in margin requirements.
3.  A change in the initial margin rates due to high volatility in any stock or scrip leading to an increase in margin requirement. 

What should you do to avoid margin shortfall penalties?

1. Keep track of the margin requirements. You can view any shortfall in your funds from the Upstox mobile app or web platform. You can view the shortfall on the ‘Funds’ screen under the ‘Available to Trade’. If the amount here is negative, then you are in a shortfall. 
2. In case of a shortfall, please add funds to your account immediately. You can add funds instantly on Upstox via UPI/NEFT/RTGS/IMPS. 

*These are only a few examples; there can be other scenarios as well.

Reliance Industries Limited’s (RIL) partly paid-up equity shares will be suspended from trading from 11th May 2021.

What are partly paid-up equity shares?
These are shares in a company which have only been partially paid for and as the company requires more funds, calls will be made from time to time from the holder of such partly paid-up shares until the shares are fully paid-up. Once fully paid-up no further call would be made towards such shares.

Why has trading been suspended on these shares?
RIL announced that the first call of Rs. 314.25 per partly paid-up equity share would be payable from 17th May to 31st May 2021. This means between these dates, Rs. 314.25 will need to be paid per partly paid-up equity share by its holders. In order to determine the holders of these partly paid-up equity shares the company has fixed 12th May 2021 as the record date. Every person who shall be holding these partly paid-up equity shares in their Demat account as on the record date would be liable to pay the call amount to the company.

What to keep in mind if you are a holder of RIL’s partly paid-up equity shares?
Here are the pointers to keep in mind if you own partly paid-up equity shares of RIL:

1. The last date for trading of these partly paid-up equity shares will be 10th May, 2021. 
2. If you are holding these shares post 12th May 2021, you’ll be liable to pay Rs. 314.25 per partly paid-up equity share

To know more, you can also read and refer to the Exchange circulars here:

NSE: https://bit.ly/3beZIkt

BSE: https://bit.ly/3f4T1CC

That’s all about the RIL’s partly paid-up shares, stay tuned for more updates from Upstox!

We are conducting a scheduled upgrade & maintenance activity on 1st May'21, from 9.00 AM to 1.00 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 to access some of our core services. Thank you for your patience & cooperation.

1st May 2021 is a bank holiday on account of Labour Day. Hence, any fund withdrawals placed after 8:00 AM tomorrow, 30th April 2021 will be processed on Monday, 3rd May 2021. To receive funds before Monday, kindly place your fund withdrawal requests before tomorrow 8:00 AM. Thank you for your patience.

All open position(s) in the F&O segment with a 29-04-2021 expiry date (except those who have opted for physical settlement) should be squared off  before 12:00 PM on 29th April 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 29th April 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 29th April 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 29th April 2021.

Feel free to refer to the exchange’ circular  here.