Pledging Mutual Funds (Margin against mutual fund holdings)

[AB1]

@nithin

Why doesn’t Zerodha allow Pledging of Mutual Funds (Margin against mutual fund holdings)?

I know they are less liquid (probabaly), bu there must be some way we can monetize these assets for getting margin?

[nithin]

@AB1

Why doesn’t Zerodha allow Pledging of Mutual Funds (Margin against mutual fund holdings)?

I know they are less liquid (probabaly), bu there must be some way we can monetize these assets for getting margin?

This should happen soon.

[AB1]

Also what about bank FD certificate as collateral? any plans to accept that?

[Jatin_Dubey]

Following

[sachinsp15]

@nithin any update on this? Zerodha can start atleast with debt funds.

[siva]

@sachinsp15

any update on this? Zerodha can start atleast with debt funds.

We are waiting for our new DP process to go live for this to happen, also with recent fiasco’s few debt funds seems more risky than they are perceived to be.

[sachinsp15]

Can you provide any rough expected time line by when this facility to open up for audience ?

[siva]

Likely another 2 months.

[yabita_padung]

Why not pledge charge be charged as DP charge which is charged only during selling of stocks…
Pledging charge must b charged during unpledging

[Amit_Koyal]

@siva: There should be some definite answer on when are you going Live on Pledging of mutual funds.
Just saying its under progress is not expected. I guess this is pending for a long time now.

[siva]

@Amit_Koyal

There should be some definite answer on when are you going Live on Pledging of mutual funds.
Just saying its under progress is not expected. I guess this is pending for a long time now.

My bad, my answer is for another query, likely it can take another 2 months.

[Augustus_Athigaman]

Why would this be a challenge, equity is even more riskier, but margins are provided for them. If the debt fund value is going drop … along with that margins provided for the clients are going to drop.

[siva]

@Augustus_Athigaman

Why would this be a challenge, equity is even more riskier, but margins are provided for them. If the debt fund value is going drop … along with that margins provided for the clients are going to drop.

This is not a challenge, I am just saying perceiving debt funds to be safest product is extremely wrong and also one should know that few debt funds are equally or much more riskier than equities unless sovereign guarantee is involved.

[gpgane]

What about pledging other than debt fund ?

[siva]

@gpgane

What about pledging other than debt fund ?

One can, it will take some time though from our end. Once our new DP process went live we will allow.

[sarang_palpattuwar]

Will debt funds be treated as cash equivalent just as liquid funds?

[siva]

No, also as of now we are allowing only liquid mutual funds which are cash equivalent, soon will allow debt funds.

[sarang_palpattuwar]

1. How soon we can expect debt mutual funds allowed to be pledged?
2. How much will be the hair cut?

[siva]

Let new pledging rules take effect, may take few more weeks,haircut is prescribed by clearing corporation.

[subhash_gupta]

If I buy hdfc liquid fund (direct) from zerodha coin, can it be pledged for option trading??