Highlights of circular issued today by SEBI as follows-
1. VAR+ELM or 20% of Exposure , whichever is lower , is to be collected from clients for upfront margin
2. Clients must ensure that VAR+ELM or 20% of exposure , whichever is lower , is paid to TM/CM as upfront margin in advance of trade
3. Clients must ensure to pay any other (Adhoc margin+ MTM margin) margin by T+2 day as per margin calls from TM/CM , clients has to ensure it and pay by T+2 day , otherwise shortage penalty can be debited to client.
4. If 20% of exposure is collected as margin from client in lieu of VRA+ELM , then there is no penalty applicable to client for short margin collection on upfront margin.
5. If client has done full pay-in for funds and securities by T+2 day , then there is no need to collect other margin from clients further and other margin will be deemed as collected and there would not be any shortage penalty to client.
6. If client has done early pay-in for selling obligation on T day , then there is no need to collect other margin from clients further and other margin will be deemed as collected and there would not be any shortage penalty to client.
7. If client fails to make pay-in by T+2 working days and TM / CM do not collect other margins from the client by T+2 working days, the same shall also result in levy of penalty to client
By: via @AlliesFin Serve Stock Market
