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Sebi provides clarity on penalty for non-collection of margins in cash segment


New Delhi: Markets limiter Sebi on Tuesday offered clarity on levy of penalty for non-collection of margins from clients in the cash segment by simply trading and clearing people. The clarification, which employs the watchdog received several representations, is with regard to be able to levy of penalty for non-collection of ‘other margins’ on or before T+2 days from clients. This ‘other margins’ exclude Vart (value at risk) border and ELM (extreme decline margin).

“If pay-in (both funds and securities) is done by T+2 working days, another margins would deemed to possess been collected and penalty for short / non-collection of other margins will not arise,” Sebi claimed in a circular dealt with to stock exchanges and even clearing corporations.

Further, this said if early pay-in of securities has been made on the clearing corporation, then just about all margins would be deemed to possess been collected and penalty for short/ non-collection of margin, including other margins, would not arise.

In circumstance a client fails to make pay-in by T+2 working days along with the trading member or cleaning member concerned does not gather other margins from the customer within the given time period, exactly the same would result in garnishment of penalty.

“It is reiterated that cleaning corporation shall continue to gather upfront VaR plus ELM and other margins from TM/ CM as applicable occasionally,” the circular claimed.

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