Different Kinds of Margins

[ShubhS9]

@vkhaitan

For collateral haircut, for cash-equivalent , it is mandated as 0%, 2%,5%,10% (Page 2 and 5 of linked circular).
in Non-cash collateral, For Group I security, it is same as (VaR) . There is no leeway given to broker to ask for additional haircut.
Zerodha asks for haircut equal to Var+ELM+AdhocMargin. That was supposed to be for buying them not for haricutting already bought shares. It is clearly mentioned that applicable rate is (VaR) in SEBI document with no additional allowed haircut. How is zerodha and other brokers charging it ? They can take VaR from exchange Or CC, but how can they ask for more ?
Is it legally allowed even ?

For collateral margins, the haircuts are applied as prescribed by the Clearing Corporation and exchanges. When the Clearing Corporation publishes the list of approved securities, they also included the haircut values for those securities. You can download this list form the exchange website here (Revised list of Approved Securities and Approved Banks).

You can also check out this thread to learn more on collateral margin haircuts: Collateral Margin Nitty-Gritty

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@vkhaitan

I also have another question. For selling and buying (eg. in smallcase), 20% delivery margin is mandatorily blocked. However, for further buying in non-T2T shares, upfront margin required is less than 80%. Zerodha RMS asks for 100% upfront cash margin and this creates issue in smallcase rebalancing. Can’t zerodha ask for just 80% upfront cash for non-T2T shares ? Since rest of the money will anyway come on T+1 ?

For buying shares for delivery we ask 100% margin as there is risk of overnight events. Also, as settlement happens on the next day itself, the broker is required to pay 100% of the purchase money to the stock exchange to receive the stocks.

Currently we do not allow MTF (Margin Trade Funding), which allows one to buy and hold stocks overnight with funding from the broker. This is on our list of things to do.

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