RMS Changes with respect to Intraday Transactions

RMS Changes with respect to Intraday Transactions

The following changes will be implemented on RMS with effect from 21/12/2020

Option Credit for Sale (CFS):

100% of Option Credit for Sale (CFS) value, will be considered for MTM calculation whereas, for margin calculation the CFS value will be considered only for option buy, due to settlement happening on T+1 DAY

Example: Client A has Cash balance of Rs.10000/-. He Squares off his NIFTY Carry forward option buy position at Rs.100/- so, the option CFS will be 75 x 100 = Rs.7500. In this case the Client’s available balance for option buying is Rs.17500/- whereas the available balance other than option buying is Rs.10000.

Client A’s available balance for MTM is Rs.17500/- and MTM square-off will be calculated from Rs.17500 x 80%.

Realized profit or Booked profit:

Realized profit or Booked profit will not be considered for margin calculation whereas the same will be considered for the MTM calculation due to settlement of Booked profit happening on T+1 Day.

Example: Client A has Cash balance of Rs.100000/-. He has Realized a profit of Rs.10000/- and Realized a loss of Rs.5000/-. In this case Client’s available margin for buying is Rs.95000/- whereas available margin for MTM is Rs.105000/-. MTM square-off will be calculated from Rs.105000 x 80%.

CNC sell benefit (CFS):

80% CNC Sell benefit will be considered for margin and MTM calculation

Example: Client A has a Cash balance of Rs.100000/- and 100 Qty SBIN stock in his Holdings. He sells SBIN 100 Qty at Rs.200/- from his holdings. In this case Client’s available balance for margin and MTM calculation is Rs.116000.

{Cash balance Rs.100000 + CNC Sell benefit Rs.16000} (CNC sell benefit = Rs.20000 x 80% = Rs.16000)

Equity Buy Delivery Limit (CNC Buy Limit):

2 Times limit for equity delivery orders will be withdrawn with effect from 21.12.2020. Henceforth 100% margin is required to place equity CNC buy orders for taking delivery.

Example:

Client A has Cash balance of Rs.100000. SBIN Market price is Rs.200/-. Hence client will be able to buy 500 Qty of SBIN shares for the value of Rs.100000/-. No additional exposure will be provided for CNC buy.

ASM Stock Margin Requirement:

No additional margin is required to buy ASM Stocks.

Example:

DHFL Price = Rs.500/-

ASM Stage = 3

Margin Required to buy DHFL 10 Qty = Rs.5000

Additional Margin Requirement = Rs.0

GSM Stock Margin Requirement:

To buy GSM stocks additional margin will be applicable as per GSM stage

Example 1:

OMKARCHEM Price = Rs.700/-

GSM stock Stage = 2

Additional Margin Requirement = 7000 x 50% = Rs.3500

Margin Required to buy OMKARCHEM 10 Qty = Rs.7000 + Rs.3500 = Rs.10500

Example 2:

ASIL Price = Rs.300/-

GSM stock Stage = 3

Additional Margin Requirement = 3000 x 100% = Rs.3000

Margin Required to buy OMKARCHEM 10 Qty = Rs.3000 + Rs.3000 = Rs.6000

Stage	Surveillance Actions
I	Applicable margin rate shall be 100% and No additional margin is required
II	Applicable margin rate shall be 100% and Additional Surveillance Deposit (ASD) of 50% is required
III	Applicable margin rate shall be 100% and Additional Surveillance Deposit (ASD) of 100% is required
IV	Applicable margin rate shall be 100% and Additional Surveillance Deposit (ASD) of 100% is required

Risk involved in Buy Back of shares under CNC product:

Please note that the buy-back of shares sold under CNC product will be considered as INTRADAY trade. Hence minimum 20% upfront margin is required while dealing with such practices failing which a penalty as per the exchange norms will be levied

Example: Client A has Cash balance of Rs.100/- and 1000 Qty SBIN stock in his Holdings. He sells SBIN 1000 qty at Rs.100 from his holdings and receives CNC sell benefit of Rs.80000(100000×80%). Using CNC CFS value client buys back the SBIN 800 qty at Rs.100. So SBIN 800 Qty buy sell trade becomes intraday trade. In this case clients fails to maintain adequate upfront margin to execute the intraday trade and this leads to a penalty.

Risk involved in margin reporting for Hedge positions:

To avoid the peak margin from getting reported for hedged positions, first exit the higher risk/margin position if adequate margins are not available. Margin requirements will be monitored by exchange including positions and any shortfall may lead to a penalty.