Collateral or margin against shares facility
This facility is available for customers who hold shares in their demat account for long-term investments. The facility is called Margin Against Shares, (MAS) for short.
How can you avail this facility?
This Facility is only available for RKSV demat account holders. In order to avail MAS (Margin Against Shares), you need to place a request over email (by sending an email to firstname.lastname@example.org) by 3 PM. The result: margins will be updated by the next trading session. Confirmation will be sent to your registered email address.
Important points to note:
A 25% haircut will be applied while calculating collateral margin over holdings (10% for LIQUIDBEES). If you have questions regarding this, please ask our technical team. Cash to collateral ratio will be maintained at 50:50. In layman’s terms, this means that in order to trade with collateral margin, at least the equivalent amount in cash must be available in your account, failing to which orders will be rejected. This facility will be allowed on all instruments except Equity delivery and Options (buy side trades). Rs.50/- per scrip will be charged toward placing a pledged or unpledged request. Click here to find the list of eligible securities which can be pledged. Even if your holdings are pledged you are still entitled to enjoy corporate actions of bonus, stock splits etc.
How about we take an example to understand this?
Shyam Kumar, a customer of RKSV holds shares of three companies in his demat account: Sun Pharmaceuticals Ind. Ltd – 125 shares Suzlon Energy Ltd – 750 shares Reliance Capital Ltd – 95 shares He wishes to pledge 100 shares of SunPharma which is trading at Rs.812.50 in order to take on a Futures position in NIFTY Futures. The value of his pledged request is: (100*812.50) = Rs. 81,250 Once we receive his request it will be processed in the following manner. RKSV will deduct 25% as haircut from the pledged value (25% of Rs. 81,250 = Rs.20,312.5). Therefore, the balance becomes Rs.60,938 (81,250.5 – 20312.5). This balance will become available to Shyam as collateral margin. This collateral margin will show under Collateral value in NEST (if you have any questions regarding this, please contact our customer support team at email@example.com).
Once margin is available, Shyam can place an order to buy two lots of NIFTY Futures which requires Rs.94,700. For this trade, as per the cash to the collateral ratio of 50:50, Rs.47,350 (50% of Rs. 94,700) will be used from free cash and the balance Rs.47,350 from collateral value. If by any chance, Shyam fails to maintain cash of Rs.47,350 in his account, then the order would be rejected.
The MAS facility is by default active on your account.
In order for us to process your MAS request further, we require the script name and quantity from you. Kindly confirm which scrips and how much quantity you wish to pledge at the earliest.