Collection and Reporting of Margins by Trading Member (TM) / Clearing Member (CM) in Cash Segment
Summary
This circular modifies previous guidelines regarding the collection and reporting of margins by Trading Members and Clearing Members in the cash segment. It introduces an exemption from penalties for short-collection or non-collection if at least 20% upfront margin is collected from clients. The revised penalty provisions are scheduled to take effect on September 1, 2020.
Text
If TM / CM collects minimum 20% upfront margin in lieu of VaR and ELM from the client, then penalty for short-collection / non-collection of margin shall not be applicable. However, it is reiterated that Clearing Corporation shall continue to collect the upfront margin from the TM / CM based on VaR and ELM.
The penalty provision for short-collection / non-collection of upfront margin in cash segment shall be implemented with effect from September 01, 2020.
All other provisions of the said circular dated November 19, 2019 shall continue to remain applicable.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Collection and Reporting of Margins by Trading Member (TM) / Clearing Member (CM) in Cash Segment. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.