Can I pledge Mutual funds for trading F&O?

[Subhadip]

invest in liquid bees, then pledge…

[TraderVenk]

If inflation is the concern, Gold ETFs are an option. I hope they can be pledged as well.

[mdsujith24]

Dose ZERODHA allow their Clint’s to pledge there mutual funds in there coin account and take margin to utilizeb for F&O trades.

I specifically want to know for mutual funds ,not for stock holdings .

[shankesh_shah]

@nithin @siva can I pledge units of mutual funds bought from the respective fund house and not from coin app with Zerodha? I will get the units converted in Demat form and credited to my Zerodha linked CDSL account.

[nithin]

@shankesh_shah

can I pledge units of mutual funds bought from the respective fund house and not from coin app with Zerodha? I will get the units converted in Demat form and credited to my Zerodha linked CDSL account.

SEBI has changed the entire pledging process which goes live from Aug 1st (securities when you pledge, remain in your demat itself). Once this happens, we intend to allow pledging all types of securities as it is easier for us to manage it. So yeah, by then if you can have this credited to your demat, it will be possible. Btw, all MF which have lock-in can’t be pledged (ELSS).

[Suneel1]

@nithin

Aug 1st

Sir,
Earlier you said it is live from July 1st

SEBI circular - Changes in Pledging and MTF

SEBI’s drive to clean up the capital market continues Here is the latest circular in which SEBI proposes to the mechanism stockbrokers use to offer margins to clients against pledged demat holdings. What changes from July 1st? Pledging of securities Currently, when a customer pledges security as margin for F&O, the securities move to the broker and through the broker to the clearing corporation (SEBI had, a few months back, disallowed these securities from being pledged with NBFCs). Once wit…

[nithin]

@Suneel1

Sir,
Earlier you said it is live from July 1st

SEBI has postponed most of these deadlines due to the lockdown.

[Piyush_A]

Few questions:

1. Once we pledge shares, can we sell them and then place request to unpledge. Eg. If we sell on Monday, and place an unpledge request, is that possible?

2. If we maintain 50% liquid mutual fund and 50% shares as margin, will entire m2m credit be allowed to be withdrawn on t+1.

3. How will 1 change once the new framework is in place. Will zerodha consider limit for shares within the demat account?

[nithin]

@Piyush_A

• Once we pledge shares, can we sell them and then place request to unpledge. Eg. If we sell on Monday, and place an unpledge request, is that possible?
• If we maintain 50% liquid mutual fund and 50% shares as margin, will entire m2m credit be allowed to be withdrawn on t+1.
• How will 1 change once the new framework is in place. Will zerodha consider limit for shares within the demat account?

1. I don’t think so. We are still waiting for clarity on this.
2. Yeah.
3. No, there will be a new pledging mechanism. We will build an interface where you request a pledge by entering an OTP. Once the pledge is confirmed, you will get the limits. This OTP will be sent by CDSL.

[Piyush_A]

Dear Nithin,

I didn’t get point 1. I mean for selling shares do I need to unpledge and wait till next day before I can place sell order.

Also, is the 50:50 thing common across mcx, nsefo and currency?

And once i pledge a share or liquid fund, is it common across above 3 segments or I have to provide separate for each segment,

Thanks

[nithin]

@Piyush_A

I didn’t get point 1. I mean for selling shares do I need to unpledge and wait till next day before I can place sell order.

Also, is the 50:50 thing common across mcx, nsefo and currency?

And once i pledge a share or liquid fund, is it common across above 3 segments or I have to provide separate for each segment,

Thanks

1. Yes. Unpledge and then sell. Like I said, we still are not sure operationally how the new pledging works. Maybe there will be a way to sell it even if it is pledged. We will have to wait for clarity.

2. Margin from pledge can be used only for NSEFO and currency.

[BOSSIET_MOSS]

Hi,
I want to know list of MF for pledging as mentioned in your google drive will changed/removed every month?
(https://docs.google.com/spreadsheets/d/1vRI4NKpJ-3mnOWxUhSRMSQD5txy8QNumzSQrdfGKyL0/edit#gid=15947263)

Also please suggest can I pledge Index fund for collateral margin?
Thank you,
Regards,
Prabhakar

[pankushri]

Yes, They Update the sheet on timely basis.
I suppose Index fund is not mentioned in the sheet, so it’s irrelevant to ask. So the answer is NO for Index Funds.

But you can Pledge Index fund ETF’s . Which is NIFTYBEES

[ShubhS9]

That list is updated regularly. You can’t pledge Index Mutual funds currently though you can pledge Index ETF’s like NiftyBees, BankBees etc. you can check the sheet for more info.

Also, SEBI is going to introduce a new pledging mechanism from August 1. @Siva can give you more insight on that.

[MayankMaheshwari]

It seems today, right now 3 pm, many mutual funds are missing from the pledging list?
is this some error or something changed?

[sohnythomas]

Is it possible for me to pledge mutual fund which i bought directly from teh fund page : Ex: Nippon India Mutual fund

I had invested in that around 2008 directly .

if yes , how do i do that . If no whats the alternative slution

[ShubhS9]

@sohnythomas

Is it possible for me to pledge mutual fund which i bought directly from teh fund page : Ex: Nippon India Mutual fund

I had invested in that around 2008 directly .

if yes , how do i do that . If no whats the alternative slution

You can only pledge Mutual Fund that are in your Demat account.

If your Mutual Fund is Direct, you can transfer it to your Zerodha Demat account, you can know more here. If you Mutual Fund is regular then you can redeem your investment and start afresh on Coin.

[trader_029]

I am not getting option to pledge L&T EMERGING BUSINESSES FUND - DIRECT PLAN and TATA INDIA CONSUMER FUND - DIRECT PLAN in my console, they do appear in the list of allowed mutual funds to pledge.

[Prabha_Mahto]

Same here, sbi Magnum medium term fund

[ShubhS9]

@Prabha_Mahto

Same here, sbi Magnum medium term fund

The SBI Magnum Medium Duration fund is available for pledging, you can check the complete list here.