Peak Margin Collection and Reporting
This is to bring to your attention an essential update on regulatory changes in collection and reporting of Peak Margins of the clients in the Cash and Derivatives segment.
As per the SEBI/Exchange Circular, brokers must report the margin collected from each client at the end of the day and Peak Margin collected during the day based on its obligations in the Cash and Derivatives segment. The Peak Margin obligation of a client across at least four snapshots (at intervals) taken by NSE Clearing Ltd shall be adopted in a phased manner, as mentioned in NSE Circular dated 8 September 2020. The penal provisions for non/short collection of Peak Margins will be applicable from 1 December 2020.
You can refer the below circulars:
1. SEBI Circular dated 20 July 2020.
2. NSE Circular dated 8 September 2020.
3. NSE Circular (FAQs) dated 28 November 2020.
4. NSE Circular dated 12 December 2019.
Please note the following:
1. There will no change for fresh buy/sell trades carried out in Cash and Carry (CNC) segment.
2. Funds would be debited from your bank account on T Day (Trade Day) to the extent of 100 % of Peak Margins required and released on the next trading day or once the margins are adjusted. Limits for the same would be provided on the next trading day.
3. For any Fresh Sell trades carried out in CNC Product and any subsequent buy order on the same day in the same security (i.e. square off order) will be allowed only to the extent of 50% of the sales proceeds (earlier 80% of the sales proceeds was allowed) . In case you wish to buy further balance quantity or more you can so do by placing funds on hold to that extent.
4. For any Fresh Sell trades carried out in CNC Product and any subsequent buy order on the same day in other security will be allowed only to the extent of 80% of the sales proceeds (earlier 100% of the sales proceeds was allowed).In case you wish to buy further balance quantity or more you can so do by placing funds on hold to that extent.
5. For fresh positions created in the Derivatives segment and subsequently squared off on the same day OR any spread/hedge positions squared off during the day resulting in the additional margin, funds would be debited from your bank account on T day to the extent of Peak Margins and released on the next trading day or after margin adjustment.
6. For any positions created in Cash or Derivatives segment by placing funds on hold , you will not be allowed to release the un-utilized funds (earlier 25% of the un-utilized amount was allowed) and the amount will be released by the End of Day.
7. In case of any shortfall for the margins required by Clearing Corporation, the system would debit funds from your bank account, which would be released once the margins get adjusted. If adequate margins are not maintained, a penalty would be levied to the extent of the shortfall as per Annexure 4 of NSE circular dated 12 December 2019.