Timelines for collection of Margins other than Upfront Margins – Alignment to settlement cycle
Summary
The circular aligns margin collection timelines with the T+1 settlement cycle for cash market transactions. Trading and Clearing Members must collect upfront VaR margins and ELM in advance, while other margins are due by the settlement day. This directive modifies specific paragraphs of the Master Circular for Stock Brokers dated August 09, 2024.
Text
TMs/CMs shall be required to collect margins (except VaR margins and ELM) from their clients by the settlement day.
TMs/CMs will have time till settlement day to collect margins (except VaR margins and ELM) from their clients. Clients must ensure VaR margins and ELM are paid in advance of trade.
If pay-in (both funds and securities) is made by settlement day, the other margins would deemed to have been collected and penalty for short / non collection of other margins shall not arise.
If client fails to make pay-in by settlement day and TM / CM do not collect other margins from the client by settlement day, the same shall also result in levy of penalty as applicable.
Make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision, as may be necessary/applicable.
Bring the provisions of this circular to the notice of the market Participants and to disseminate the same on their website.
Source: SecMarx — Timelines for collection of Margins other than Upfront Margins – Alignment to settlement cycle. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.