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MUMBAI :
The Securities and Exchange Board of India (Sebi) has deferred penalty by a month for any quick collection of upfront margin, a transfer which will present some aid to inventory brokers and merchants. Also, if brokers gather a minimal 20% upfront margin then a penalty for brief collection or non-collection of margin shall not be relevant, the market regulator mentioned in a round issued on Friday.
The relaxed framework can be relevant from 1 September.
This addresses one of many main issues over purchase as we speak, promote tomorrow (BTST) trades, the place a majority of brokers as a observe used to gather not less than 40% margin.
Earlier in November 2019, with a view to scale back speculative commerce and extra volatility, Sebi mandated that even in money phase the buying and selling members and brokers would want to gather margins upfront from shoppers, failing which the brokers would want bear penalties for any quick collection. The rule got here into impact 1 August, 2020 onward.
In a separate round issued as we speak, NSE mentioned that securities in buying and selling member’s account can be thought of as margin for promote trades. This successfully removes the restriction on proceeds from sale of shares on commerce day.”In respect of sale of shares by a client for which early pay-in has been accepted by CC (clearing corporation) since settlement of the trade is guaranteed by the CC, member may choose to give credit of the sale value of the shares in the ledger account of the client, which may be considered as margin towards subsequent trade/s of the client,” the round reads.
“After several representations from the broking community, a lot of the possible hardships have been corrected by the circulars issued by Sebi and NSE. A lot of the unintended adverse consequences have now been dealt with and the impact on investors will be far lower. The revised circulars now create a win win for all instead of earlier position which was a lose-lose for all market participants,” mentioned Jimeet Modi, CEO, SAMCO Securities.
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