The link you provided Requirement for 50:50 Cash & Collateral points to Effective deposits in https://www1.nseindia.com/products/content/derivatives/equities/margins.htm which talks about CM’s requirement with the exchange of 50:50 rule but not about client’s 50:50 rule with a broker. So, I think Zerodha can also remove this client’s 50:50 requirement (which doesn’t exist) like Motilal because it is a very good feature of Motilal as mentioned by others. Otherwise, why would Motilal break rules?
Yes to my understanding 50:50 cash to collateral is required at CM (clearing member level) not at broker or client level. To understanding steps in the ladder are 1. Client 2. broker 3. clearing member 4. clearing corporation (which is part of NSE) 5. NSE itself 6. SEBI 7. Finance ministry 8. Govt of India
To my latest knowledge, Finvasia, Motilal Oswal and Samco allow you to use full collateral margin without cash requirement. Like Siva or Nithin said - with Motilal there might be additional brokerage cost compared to Zerodha but Finvasia is free and for Samco they charge interest on 50% cash margin they provide to clients. @TradeB2B@Vij
Thanks for the information. Do you also know how Finvasia manages to give 100 % non-cash component to clients? Motilal Oswal provides by charging extra brokerage charge as you mentioned and Samco and Zerodha do it by charging interest. How is Finvasia providing without charging anything? I am sure it is not paying from its own pocket?
I also believe - its not paying from its own pocket. But at the moment I don’t know how it works. I will find out soon because I am highly curious. One thing I do know – Finvasia itself is a clearing member and I am sure NSE mandates 50:50 ratio at clearing member level not at broker level.
Another thing I also know that cash component does not mean CASH only …it includes, bank guarantee, fixed deposit receipts, T-bills and dated government securities. So I am guessing Finvasia or any clearing member(I think Zerodha is also a clearing member) have to keep some FD or Bank guarantee with clearing corporation as deposit any way, so they don’t need to pay out of their own pocket. @TradeB2B@Vij@rupeshmandal@Prayag
I suppose others have to do ONE BETTER to gain marketshare. Good on them. And I think if Zerodha gets complacent and lets up, others will creep up. All said and done, most people who are on Upstox and Finvasia use those as secondary accounts, Zerodha Trust still matters!
Issue with Finvasia is that they don’t accept mutual funds as collateral till today. That is the only issue I have with them. They don’t charge brokerage or interest for non-maintanance of 50:50 cash.
The whole idea is to find brokers who take mutual fund as collateral with no 50:50 rule and charge per order brokerage (no brokerage is even better). Let’s not revolve around 2,3 brokers. People who use other brokerages shall comment please.
You are correct, There is a rule which says that the BROKER has to maintain a 50:50 Ration but not by the CLIENT.
Since usually broker deposits additional funds to the exchange by way of FDs / cash that will be adjusted by them against this ratio. Some of the clients also do not pledge securities and instead deposit cash which overall gets adjusted in ration of broker exchange ratio.
Last time I checked with them and checked forum on traderji - I found that they don’t require 50:50 …they prefer but not compulsory …if u don’t have 50% cash …they will not charge interest on shortfall.
a) Do you know what the requirement is with Sharekhan? Wanted to pledge shares & use it for FnO…
b) Also, per order brokerage is important for me. What’s the brokerage these brokers usually charge for that? Back in the day, remember ICICI used to have very high charges, but now they have the cheaper neo plan which is at par with the discount brokerages…
Can you please ask them if they charge interest on 50% cash.
It is one thing that they allow you to have position …Even zerodha allows that …they are not stopping you but if you don’t have min. 50% cash …they would charge interest…not sure about Samco
Does NEO plan accept Direct MF Units for pledge and if accepted are there any additional charges for pledging, I heard some where that angel broking charges interest for pledged shares/units also.
what is the brokerage of motilal oswal for this plan ???
Recently i checked from their customer care and they said 40 percent cash requirement is there. Is that true?
Does any broker who takes mutual funds as collateral & also have bracket order option?
Zerodha doesn’t have bracket order option.
Upstox doesn’t take mutual fund as collateral.
