In what form should a member collect margin from its constituents?

Members may collect margins from its respective client, in any of the following forms,
after taking into account their risk management policy and liquidity aspects.
• Free and unencumbered Balances (funds and securities) available with the member
of respective client in different segments of the Exchange *.
• Bank guarantee received towards margin, issued by any approved bank and
discharged in favor of the Member.
• Fixed deposit receipts (FDRs) received towards margin issued by any approved bank
and lien marked in favor of the Member.
• Securities in dematerialized form actively traded on the National Exchanges, not
declared as illiquid securities by any of such Exchanges. (List of illiquid securities
are declared on a regular basis by the Exchanges) with appropriate hair cut.
• Units of liquid mutual funds in dematerialized form, whose NAVs are available and
which could be liquidated readily with appropriate hair cut.
• Government securities and Treasury bills in electronic form with appropriate hair cut.
• Free and unencumbered Balances (funds and securities) available with the member
of respective client in different segments of any Stock Exchange, with specific
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authorization from the client, subject to certification by independent Chartered
Accountant.
• Securities given as margin which are sold in the cash market and the securities are in
the pool account of the Trading Member but are not given as early pay in towards an
obligation to deliver shares in the Capital Market Segment, benefit of margin be
given to the client till T+1 day from the sale of securities without any hair cut.
• In case of clearing member, the amount of deposit of Trading Member with NSCCL
on which NSCCL gives benefit to the clearing member.
• Any other such collaterals, as may be specified by NSCCL from time to time
*Free and Unencumbered funds / securities in the account of the client for which
the client has given POA in favor of the member client allowing the member to
transfer the same for the purpose of margin, may also be considered provided:-
a) Trading Member or its associate company is a Depository Participant and POA
for considering securities towards margins is in favor of Trading Member,
b) Funds available in the bank account of client and actually moved to client bank
account maintained by the member byT+1 day, using POA issued by the client
in favor of the member.

 

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