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Dear Customer,
We hope all is well with you.
This is to bring to your attention a change in margin requirements in Equity Cash Segment.
As per the SEBI circular No: CIR/HO/MIRSD/DOP/CIR/P/2019/139, upfront margins will be mandatory for all trades in the cash segment. This circular is applicable from 1st August 2020.
Important Changes due to this circular:
- You are required to maintain upfront margins to execute every trade in the cash market too.
- This includes both 'Buy' and 'Sell' transactions.
- The margin can be in the form of cash / stock or other acceptable forms of margins.
- Insufficient margin can lead to penalties by the Exchange/ Squaring off of your positions.
Below is the list of components which will be considered or not considered as upfront margin for Exchange Margin Requirement and as Limits for Trading up till 31st August 2020:
| Margins Components |
Considered as upfront margin for Exchange Margin Reporting till 31st August |
Considered as Limits for Trading |
| Cash available |
Yes |
Yes |
| Stock collateral/Pledged Stocks |
Yes |
Yes |
| Sell Credit |
Yes - After considering exchange haircut |
No |
| Intraday Realized Profit |
No |
No |
| Option Sell Credit |
No |
No |
| Collateral Limits on T1 Holdings |
No |
No |
Sell Credit = Amount released on sale of shares.
Exchange Haircut = VaR + ELM Margins
How this affects you:
In case you had given a POA in favor of Edelweiss Broking Ltd. to consider the stocks in your demat account as margin, such securities were considered as margin for your trades. Effective August 1, 2020 these shares cannot be considered as margin.
Since we strive for you to have a seamless trading experience, the shares in your demat account will now have to be pledged in favor of Edelweiss Broking Ltd. to be treated as margin for your trades (we will explain the process of pledging shares in detail in our subsequent communications).
Which trades get affected?
Along with ‘buy’ and ‘sell’ orders, trades where you sell the shares before the settlement day i.e., before the delivery of shares, will also be affected.
Such shares are referred to as “T1” holdings across all platforms. From 1st of August onwards, selling of T1 holdings:
| Exchange Margin Requirement (VaR+ELM Margins) |
Selling of T1 Holdings |
| Greater than 50% |
Not allowed |
| Upto 50% |
Allowed |
Exchange Margin Requirement (VaR+ELM Margin) can be checked here
You will also not get limits against stock sold for trading till T+2 days.
What if adequate margins are not maintained?
On non-adherence of adequate margins, Edelweiss Broking Limited is authorized to sell part or full stocks in your trading account.
Please click on the link to view SEBI Circular and Exchange Faqs in this regards.
In case of any further query or clarification, please feel free to speak to your Wealth Manager; alternatively you can write to us at helpdesk@edelweiss.in.
Assuring service True To You, Always.
Warm regards,
Team Edelweiss*
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