Collateral Allocation implementation-intimation

 

SEBI vide circular SEBI/HO/MRD2_DCAP/CIR/2021/0598 dated July 20, 2021 has put in place a framework for Segregation and Monitoring of Collateral at Client Level. The allocation thus provided by Trading Member/Clearing Member to Clearing Corporation shall be considered as final for the purpose of grantin exposure and utilization during default. The allocation of collateral shall be implemented with effect from May 02, 2022.

 

In accordance with aforesaid circular and with a view to provide visibility of client-wise collateral, Clearing Corporations have provided a web portal facility to allow investors to view their disaggregated collateral placed with Member and as reported by their registered Trading Member /Clearing Member.

 

The said facility will provide the following benefits:

 

  • Investors can verify/ validate the collaterals deposited by them with the members vis-à-vis the collaterals reported by members to clearing corporations.
  • Investors can also view break-up of their collateral lying with the trading member, clearing member and clearing corporations.
  • Visibility through web portal will bring transparency with respect to their collateral placed with trading member on daily basis in seamless manner.

 

Members are expected to submit the collateral details as at the end of business on a given day (say T) before 5:00 PM on next working day (T+1). Thus, the collateral details as reported by the Member for the registered investor would be available for viewing after 5:00 PM.

 

Investors can register with the respective clearing corporations and view the collateral details reported by the members for the previous five days.

 

Investors are requested to ensure that their email address and mobile number are updated by their Trading Members in UCI System of the Exchanges, as the same would be validated at the time of user registration to view the collateral details.

 

Investors may note that collaterals placed with Trading Member/Clearing Member in one form (e.g. cash) may have been passed on by the Trading Member to Clearing Member or by the Clearing Member to the Clearing Corporations in any other form (e.g. fixed deposit/ bank guarantee).

 

Investors are urged to regularly view the details of their collateral available with the respective clearing corporations and in case Investors find any discrepancy in the collateral deposited by them with their members and as reported by respective trading members/clearing members to clearing corporations, they are advised to take up the matter immediately with their trading member. In case of non-resolution of discrepancy by the trading member, Investors may intimate the same to the Exchange at email id ignse@nse.co.in/toll free number 18002660050 (Option 5) or register an online complaint at https://www.nseindia.com/invest/download-complaint-form-for-offline-registration

 

 

Revised Guidelines On Margin Collection

 

  1. “Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
  2. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
  3. Pay 20% upfront margin of the transaction value to trade in cash market segment.
  4. Investors may please refer to the Exchange’s Frequently Asked Questions (FAQs) issued vide circular reference NSE/INSP/45191 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020/ BSE notice no. 20200731-7 dated July 31, 2020 and 20200831-45 dated August 31, 2020 and other guidelines issued from time to time in this regard.
  5. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month. ………. Issued in the interest of Investors

Advisory for investors

 

  1. Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
  2. Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.
  3. Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from Member funds / IPF to the clients of the defaulter member. These norms are available on Exchange website at following link:                                                                                                 NSE: https://www.nseindia.com/invest/about-defaulter-section ,                       BSE:https://www.bseindia.com/static/investors/Claim_against_Defaulter.aspx  ,                                                                                                                                 MCX: https://www.mcxindia.com/Investor- Services/defaulters/sop-process-faqs-for-handling-of-claims-of-investors-of-defaulter-member
  4. Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.
  5. Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.
  6.  Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.
  7. Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.
  8. Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.
  9. Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

 

SEBI Complaint Redress System (SCORES)

 

“Filing complaints on SCORES – Easy & quick

a. Register on SCORES portal

b. Mandatory details for filing complaints on SCORES:

i. Name, PAN, Address, Mobile Number, E-mail ID.

c. Benefits:

i. Effective communication

ii. Speedy redressal of the grievances.”

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