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Anmi urges Sebi to waive short margin penalty collection till Sep 15

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NEW DELHI: Stock brokers’ association Anmi on Thurs night urged markets regulator Sebi to waive the penalty for short margining out of all segments till September 15 as systems are not totally geared for the new device about ‘pledge and repledge’.

The new mechanism on ‘pledge and repledge’ arrived to force from September 1.

Under the new framework , commodity brokers will have to gather margins from investors straight up for any purchase or sale for shares and failure to do so will attract penalty.

In its letter to Sebi, Anmi requested the limiter to postpone the penalty provisions on the cash plus derivative segment till Sept. 2010 15 as systems are generally not geared and tested totally, in spite connected with the assertions of market infrastructure institutions.

According to the brokers’ connection, the ground reality is different and participants and investors are being place to great difficulty thanks to the inadequate methods, which have been developed to put into action these measures. This will end in short margin because of program related issues.

It further more requested Sebi to waive any penalty in the money and derivative segments to the extent the gives you are not pledged (due to multiple reasons) but telling lies in the demat account with the client as per previous methods prevailing till August 31.

The Association of Nationalized Exchanges Members of Indian (Anmi), a grouping connected with around 900 stock broker agents from across the country, said the members are proactively plus sincerely implementing the new margin system. However, there are excessive delays happening at each degree of the process with clearing organizations and depositories.

It explained forced implementation of new margin system has derailed your entire settlement cycle of commodity exchanges and clearing organizations.

“Investors are badly influenced too, as regular pay-in and pay-out of cash and shares isn’t transpiring since last two days contributing to members involuntarily contravening the particular provisions of applicable company directions,” it extra.

There are multiple techie glitches with regards to launching of securities, one time accounts (OTPs), pledge and repledge issues, delay in pay-in and pay-out process, thus resulting into disruptions around margin collections, the brokers’ association pointed out.

It further more said brokers are experiencing financial pains and strong financial losses due to such technical issues.

Additionally, Anmi requested Sebi with regard to allowing collateral account to be operative after June 31, till September 30.

Also, it requested Sebi to allow a simultaneous system of considering collaterals which can be pledged as well as lying from the demat account of the buyer where broker has a poa (POA) for margin revealing in the cash and mixture segment for the month connected with September.

Under the ‘pledge and repledge’ framework, trading participants (TMs)or clearing members (CMs)will require to line-up their systems and take client collateral and margin-funded stocks by way connected with creation of pledge and repledge from the depository system.

Depositories will need to provide “margin pledge” with regard to pledging clients’ securities since margin to the TM or CM. The latter will need to open a separate demat be the cause of accepting such margin give your word, which should be tagged as “client securities margin pledge account”.

To provide collateral available as securities as margin, a customer will be required to give your word securities with TM, plus TM will repledge the exact same with CENTIMETER, and CM in turn will repledge the exact same to clearing corporation.

The complete trail of these repledge will be reflected from the demat account of the pledgor.

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