Implementation of Circular on ‘Margin obligations to be given by way of Pledge / Re-pledge in the Depository System’ – Extension.
Summary
SEBI extends the implementation date of its February 2020 circular on margin obligations via pledge to August 1, 2020, due to the Covid-19 pandemic. Trading and clearing members must close existing demat accounts tagged as 'Client Margin / Collateral' by August 31, 2020. The provision regarding Power of Attorney not equating to margin collection remains effective from June 1, 2020.
Text
it has been decided to extend the implementation date of the aforesaid circular to August 01, 2020
trading member (TM) / clearing member (CM) shall be required to close all existing demat accounts tagged as ‘Client Margin / Collateral’ by August 31, 2020
the provision as specified in paragraph 4 of the aforesaid circular regarding holding of Power of Attorney by TM / CM not to be considered as equivalent to the collection of margin... shall be applicable from June 01, 2020
such confirmation shall be required only once from the client / pledgor at the time of initial creation of pledge in favour of TM / CM and subsequent repledging by TM / CM shall not require any further confirmation from the client / pledgor
Stock Exchanges, Clearing Corporations and Depositories are directed to bring the provisions of this circular to the notice of their members / participants and also disseminate the same on their websites
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Section 19 of the Depositories Act, 1996
Source: SecMarx — Implementation of Circular on ‘Margin obligations to be given by way of Pledge / Re-pledge in the Depository System’ – Extension.. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.