About Margin Trading Facility
RIGHTS & OBLIGATIONS OF STOCK BROKERS & CLIENTSFORMARGIN TRADING FACILITY (MTF) - NSECLIENT RIGHTS
1. Client shall receive all communications in a mode mutually agreed between the broker
and the client regarding confirmation of orders/trades, margin calls, decision to liquidate
the position / security.
2. Client shall be free to take the delivery of the securities at any time by repaying the
amounts that was paid by the Stock Broker to the Exchange towards securities after
paying all dues.
3. Client has a right to change the securities collateral offered for Margin Trading Facility at
any time so long as the securities so offered are approved for margin trading facility.
4. Client may close / terminate the Margin Trading Account at any time after paying the
dues.
CLIENT OBLIGATIONS
1. Client shall, in writing in his own hand or in any irrefutable electronic method, agree to
avail of Margin Trading Facility in accordance with the terms and conditions of Margin
Trading Facility offered by the broker, method of communication for confirmation of
orders/trades, margin calls and calls for liquidation of collateral/security/position.
2. Client shall inform the broker of its intent to shift the identified transaction under Margin
Trading Facility within the time lines specified by the broker failing which the transaction
will be treated under the normal trading facility
3. Client shall place the margin amounts as the Stock Broker may specify to the client from
time to time.
4. On receipt of ‘margin call’, the client shall make good such deficiency in the amount of
margin placed with the Stock Broker within such time as the Stock Broker may specify.
5. By agreeing to avail Margin Trading Facility with the broker, client is deemed to have
authorized the broker to retain and/or pledge the securities provided as collateral or
purchased under the Margin Trading Facility till the amount due in respect of the said
transaction including the dues to the broker is paid in full by the client.
6. Client shall lodge protest or disagreement with any transaction done under the margin
trading facility within the timelines as may be agreed between the client and broker.
STOCK BROKER RIGHTS
1. Stock Broker and client may agree between themselves the terms and condition including
commercial terms if any before commencement of MTF.
2. Stock broker may set up its own risk management policy that will be applicable to the
transactions done under the Margin Trading Facility. Stock broker may make amendments
there to at any time but give effect to such policy after the amendments are duly
communicated to the clients registered under the Margin Trading Facility.
3. The broker has a right to retain and/or pledge the securities provided as collateral or the
securities bought by the client under the Margin Trading Facility.
4. The broker may liquidate the securities if the client fails to meet the margin call made by
the broker as mutually agreed of liquidation terms but not exceeding 5 working days from
the day of margin call.
STOCK BROKER OBLIGATIONS
1. Stock broker shall agree with the client the terms and condition before extending Margin
Trading Facility to such client. However, for clients who already have existing trading
relationship and want to avail of Margin Trading Facility, stock broker may take consent
in writing in his own hand or in any irrefutable electronic method after stock broker has
communicated the terms and conditions of Margin Trading Facility to such existing
clients.
2. The terms and conditions of Margin Trading Facility shall be identified separately, in a
distinct section if given as a part of account opening agreement.
3. The mode of communication of order confirmation, margin calls or liquidation of
position/security shall be as agreed between the broker and the client and shall be in
writing in his own hand or in any irrefutable electronic method. Stock broker shall
prescribe and communicate its margin policies on haircuts/ VAR margins subject to
minimum requirements specified by SEBI and exchanges from time to time.
4. The Stock Broker shall monitor and review on a continuous basis the client’s positions
with regard to MTF. It is desirable that appropriate alert mechanism is set up through
which clients are alerted on possible breach of margin requirements.
5. Any transaction to be considered for exposure to MTF shall be determined as per the
policy of the broker provided that such determination shall happen not later than T + 1
day.
6. If the transaction is entered under margin trading account, there will not be any further
confirmation that it is margin trading transaction other than contract note.
7. In case the determination happens after the issuance of contract, the broker shall issue
appropriate records to communicate to Client the change in status of transaction from
Normal to Margin trading and should include information like the original contract
number and the margin statement and the changed data.
8. The Stock Broker shall make a ‘margin call’ requiring the client to place such margin;
any such call shall clearly indicate the additional/deficient margin to be made good.
9. Time period for liquidation of position/security shall be in accordance declared policy of
the broker as applicable to all MTF clients consistently. However, the same should not be
later than 5 working (trading) days from the day of ‘margin call’. If securities are
liquidated, the contract note issued for such margin call related transactions shall carry an
asterisk or identifier that the transaction has arisen out of margin call.
10. The daily margin statements sent by broker to the client shall identify the
margin/collateral for Margin Trading separately.
11. Margin Trading Accounts where there was no transactions for 90 days shall be settled
immediately.
12. The stocks deposited as collateral with the stock broker for availing margin trading
facility (Collaterals) and the stocks purchased under the margin trading facility (Funded
stocks) shall be identifiable separately and there shall not be any comingling for the
purpose of computing funding amount;
13. Stock Broker shall close/terminate the account of the client forthwith upon receipt of such
request from the client subject to the condition that the client has paid dues under Margin
Trading Facility.
TERMINATION OF RELATIONSHIP
1. The margin trading arrangement between the stock broker and the client shall be
terminated; if the Stock Exchange, for any reason, withdraws the margin trading facility
provided to the Stock Broker or the Stock Broker surrenders the facility or the Stock
Broker ceases to be a member of the stock exchange.
2. The MTF facility may be withdrawn by the broker, in the event of client committing any
breach of any terms or conditions therein or at anytime after due intimation to client
allowing such time to liquidate the MTF position as per the agreed liquidation terms
without assigning any reason. Similarly, client may opt to terminate the margin trading
facility in the event of broker committing any breach of any terms or conditions therein or
for any other reason.
3. In the event of termination of this arrangement, the client shall forthwith settle the dues of
the Stock Broker. The Stock Broker shall be entitled to immediately adjust the Margin
Amount against the dues of the client, and the client hereby authorizes the Stock Broker
to make such adjustment.
4. After such adjustment, if any further amount is due from the client to the Stock Broker,
the client shall settle the same forthwith. Upon full settlement of all the dues of the client
to the Stock Broker, the Stock Broker shall release the balance amount to the client.
5. If the client opts to terminate the margin trading facility, broker shall forthwith return to
the client all the collaterals provided and funded securities retained on payment of all the
dues by clients.
RIGHTS AND OBLIGATIONS RELATING TO MARGIN TRADING FACILITY
PROVIDED BY STOCK BROKER/ TRADING MEMBERTO CLIENTS - BSE
1. Stock Broker/ Trading Member is eligible to provide Margin Trading Facility (MTF) in
accordance with SEBI Exchange Guidelines as specified from time to time.
2. Stock Broker/ Trading Member desirous of extending MTF to their clients is required to
obtain prior permission of BSE. Stock Broker/ Trading Member may note that BSE has
the right to withdraw the permission at anytime.
3. Stock Broker/ Trading Member shall extend the MTF to the client, on such terms and
conditions as specified by the Stock Exchange / SEBI from time to time. Stock Broker/
Trading Member and the client shall abide by the requirements of the margin trading
framework, including rights and obligations, as prescribed by Stock Exchange/ SEBI/
Stock Broker/ Trading Member.
4. Stock Broker/ Trading Member shall intimate all the terms and conditions, including
maximum allowable exposure, specific stock exposures etc., as well as the rights and
obligations to the client desirous of availing MTF.
5. Stock Broker/ Trading Member may, at its sole and absolute discretion, increase the limit
of initial and/or maintenance margin, from time to time. The Client shall abide by such
revision, and where there is an upward revision of such margin amount, he agrees to make
up the shortfall within such time as the Stock Broker/ Trading Member may permit. It
may however, be noted that the initial/ maintenance margins shall never be lower than
that prescribed by Stock Exchange/ SEBI.
6. Stock Broker/ Trading Member shall provide MTF only in respect of such shares, as may
be permitted by Stock Exchange/ SEBI.
7. Stock Broker/ Trading Member shall liquidate the securities and other collateral, if the
client fails to meet the margin call to comply with the margin requirement as specified by
Stock Exchange/ SEBI/ Stock Broker/ Trading Member. In this regard, Stock Broker/
Trading Member shall also list down situations/ conditions in the which the securities
may be liquidated (Stock Broker/ Trading Member to list down situations/ conditions):
8. Stock Broker/ Trading Member shall not use the funds of one client to provide MTF to
another client, even if the same is authorized by the first client.
9. The stocks deposited as collateral with the Stock Broker/ Trading Member for availing
margin trading facility (Collaterals) and the stocks purchased under the margin trading
facility (Funded stocks) shall be identifiable separately and no comingling shall be
permitted for the purpose of computing funding amount
10. IPF shall not be available for transactions done on the Stock Exchange, through MTF, in
case of any losses suffered in connection with the MTF availed by the client.
The rights and obligations prescribed hereinabove shall be read in conjunction with the
rights and obligations as prescribed under SEBI circular no. CIR/ MIRSD/ 16/ 2011
dated August 22, 2011.
TERMS AND CONDITIONS OF RKSV SECURITIES INDIA PVT. LTD. (UPSTOX) FOR
MARGIN TRADING FACILITY
The Margin Trading Facility would be available in accordance to the additional terms and
condition laid down below:
1) To avail the Margin Trading Facility by client the minimum margin requirement would be
VAR + 3 times of ELM in case of F&O Stock and VAR + 5 times of ELM in case of Non
F&O Stock. However if the EOD margin requirement as provided by the exchange is
higher than the MTF margin requirement, such additional margin requirement would be
required to be fulfilled by the client. Non fulfilment of margin requirement may result in
shortfall and subsequent penalty.
2) Such margin would be only in the form of Cash or Collateral as may be decided by
Upstox.
3) No client would be provided exposure beyond a limit as may be decided by Upstox from
time to time.
4) The Client understands that Margin Trading Facility would be extended only for the
Stocks as determined by Upstox from time to time among the Group 1 category as
permitted by the exchange. If at any time the funded stock moves out of the Group 1
category, client would be compulsorily required to liquidate such position within 30 days
from the date such shares moves out of the Group 1 category. In case such a position is
not liquidated by client, Upstox shall liquidate such position on the 30th day.
5) Post square off (whether by client or Upstox), margins would be released from T+1 day.
6) The tender period for Margin Trading position so taken up by the client would be valid
for such a number of days from the trade date of such position as may be decided by
Upstox from time to time. Clients would be required to release such a position on or
before the date as may be intimated to the client by Upstox by taking delivery of such
shares by paying the funded amount or by squaring off such position. Any pending
position beyond the intimated date may be squared off at the prevailing market rates on
best effort basis by Upstox; Upstox shall not be responsible for any loss arising to client
from such square off, further clients would not be allowed to take any new position in the
same script for position squared off by Upstox. Post squaring off of the position funds
would first be allocated towards satisfying the funded, interest accumulated to Upstox and
statutory charges as applicable and only the balance would be credited to the client ledger.
7) Fees, Charges, Interest & Penalty:
a. Brokerage of Rs. 20 or 0.10% whichever is less would be applicable per order (on
both Buy and Sell Transaction, whether delivery or Intraday or BTST trade) under
Margin Trading Facility.
b. Pledge / Unpledge / confiscation (Invocation) charges @ Rs. 20 shall be
applicable.
c. Square off charges @ Rs. 50 shall be levied for every position so squared off by
Upstox.
d. Interest charges* for using Margin Trading Facility would be Rs. 20 per day for
every Rs. 40000 of the funded amount.
e. Penalty @ Rs. 50 per day for every Rs. 40000 of the funded amount as provided
for condition in clause 9
f. Margin shortage penalty as per exchange rates.
* The charges would be applicable from the date of funds PayIn to the exchanges
and till the date of funds payout received from the exchange post square off of the
Margin Trading position.
g. Other statutory charges (including confiscation) and taxes shall apply as
applicable and borne by the client.
8) As per regulatory requirement for entering into Margin Trading position, clients would be
prompted to create a future pledge at the CDSL systems in favour of RKSV Securities
India Pvt. Ltd – MTF Account. Clients would be required to confirm such pledge within a
stipulated time (as may be decided by Upstox) on the trade day to continue with the MTF
position.
9) Non acceptance of pledge request within the stipulated timelines, would lead to
converting the MTF position to normal position on T day. Such a position shall be
squared off any time after the settlement day but before the regulatory norms. Funds
blocked during the settlement of such position(s) would be liable to penalty as provided in
clause 7.
10) The Margin Trading position of the client shall always be marked to market. Accordingly,
at any point of time, if the MTM loss of the client goes beyond 70% of the margin value
deposited by such client with Upstox towards the MTF open position(s), the client
position(s) shall be squared off at the prevailing market rate by confiscating (invoking)
the shares associated to such position of the client.
11) Client shall be solely responsible to fulfil any margin calls made by Upstox during the
existence of the position. Non fulfilling of margin requirements may lead to conversion of
MTF position into delivery in case funds are available, in case of non availability of funds
Upstox would mandatorily confiscate the shares and sell them at the prevailing market
rate.
12) In case there is a shortfall in receipt of securities against the buy position of the client,
such shortfall shall be dealt with in the following manner:
a) In case there is a payout shortage(s) on the settlement day for bought MTF
position(s), the same would be converted to normal delivery in the client’s
account. The shares thus received on the settlement date or under Auction payout
would be delivered to the clients demat account upon full payment of the position
else would be held back in CUSPA account. The client will have to make the
payment for the unpaid part within the timelines as prescribed under the
regulatory norms, else such shares shall be squared off by the end of such
timeline.
b) Incase of the closeout credit for the bought MTF position(s), the same would be
credited to the client’s account.
Under both the above points (a & b) Upstox shall first recover the funded amount and
only the balance amount (if any) would be credited to the clients ledger on the
settlement date. Upstox shall not be liable for any loss arising to the client.
13) To satisfy any obligation / dues of the client under Margin Trading Facility funds from the
client’s normal ledger would be moved to his / her MTF ledger by passing a JV.
14) Client shall at all times be fully responsible to make good any dues pending to be paid to
Upstox, such dues may not be limited to only funded amount or charges, it may also
include statutory charges, Taxes etc.
15) On squaring off any position by client or by Upstox from such sale value the funded
amount, applicable taxes, applicable charges and applicable upfront margin would first be
reduced and only on the balance amount further exposure shall be granted (if any).
16) If at any point there is any margin shortfall, the client shall be responsible for penalties
applicable (if any).
17) The client understands that Upstox shall be reporting to the stock exchanges on a daily
basis the details of the client's funded position/collaterals position and such other details
as may be required.
18) The client understands that Upstox reserves the right to modify any of the terms in the
relation to Margin Trading facility so provided here in the document.
19) The client understands that from the date of signing this document if there are any
regulatory / operational changes in the functioning of the Margin Trading Facility, such
changes shall apply without any intimation to the client.
20) Upstox reserves the right to deny providing of the Margin Trading Facility to any client
without assigning any reason. During the existence of the agreement, if it is found any
breach / fraud has been committed by the client against Upstox, such client shall be liable
to make good all the financial loss incurred by Upstox including any legal and technical
cost that would have been borne by Upstox. The client would also be subject to any legal
action as may be necessary.
21) Upstox also reserved the right to withdraw the Margin Trading facility any time by
issuing a notice of not greater than 30 days to its clients. On withdrawal of such a facility
, a client would be required to settle its position and clear out any pending dues.
22) The client understands that the service provided hereunder is through the use of
software’s and systems. If at any point of time there is any technical failure, Upstox or the
exchange shall not be responsible for any loss suffered by the client.
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