How does pledging of FD for F&O margin work

[siva]

@TradeB2B

please take this matter to clearing corporation

Yeah, we are taking up with them and getting things done.
@Nakul @VenuMadhav

[VenuMadhav]

@TradeB2B

if you have the list of colleterial files from clearing corporation please share with me

https://archives.nseindia.com/content/circulars/CMPT47702.zip

[VenuMadhav]

@TradeB2B

then why the drama some fund dividend fund are allowed but growth funds are not allowed

What’s the ISIN you’re referring to? Please provide the one that is allowed and the one that isn’t.

[TradeB2B]

SBI Banking and financial fund - growth
isin- INF200KA1507

[TradeB2B]

AXIS GROWTH OPPOURTY FUND GROWTH
isin- INF846K01J46

[VenuMadhav]

@TradeB2B

i have sbi banking and financial services fund i cannot pledge , in your list regular plan is available , then why direct plan is not available to pledge ,

You said the regular fund is allowed to be pledged and the direct isn’t. I’m asking you to share the regular fund ISIN (that is accepted) and the direct fund ISIN (that isn’t being accepted)

[TradeB2B]

@VenuMadhav
AXIS GROWTH - REGULAR - ISIN- INF846K01J79 ( This is ok for pledge)
AXIS GROWTH - DIRECT - ISIN- INF846K01J46 (This is not allowed to pledge )

SBI BANKING FUND - REGULAR - ISIN - INF200KA1473 ( This is ok for pledge)
SBI BANKING FUND - DIRECT - ISIN - INF200KA1507 (This is not allowed to pledge )

[TradeB2B]

@VenuMadhav , we can expect to pledge these direct funds or if i need to switch to other fund

[VenuMadhav]

So the response from CC is that a lot of factors go into deciding instruments that can be accepted as pledge. There’s a selection criteria for MFs too.Have asked them for info, will get back when they revert.

[ManoranjanS]

Kindly also check for UTI Nifty index fund. This has AUM of 2.5 k but still not included into list.

Thanks

[VenuMadhav]

@VenuMadhav

asked them for info,

According to NCL (NSE Clearing), all MF schemes available on NSE MFSS (NSE’s Mutual Fund platform) platform and meeting liquidity and volatility criteria shall be considered for pledge.

This is the list of all ISINs available on NSE MFSS is here. The MF units allowed for pledge is a subset of this.

The ISINs you’ve mentioned above of direct funds ( INF846K01J46 & INF200KA1507) aren’t available on NSE MFSS yet and hence can’t be pledged.

[Sureesh]

@siva @VenuMadhav

First of all I would like to thank the whole Zerodha team for the wonderful achievement that you’ve accomplished so much as a young broking company in India in a decade.

Zerodha is one of the very few platform to offer Mutual funds with Direct plan.

Regarding Pledging, some of the mutual funds of Regular plan are accepted for pledging while Direct plans are not.

Example: INF200KA1473 is accepted for collateral where as INF200KA1507 is not.

INF200KA1473 SBI BANKING AND FINANCIAL SERVICES FUND - REGULAR PLAN - GROWTH
Expense Ratio for regular is 2.12%

INF200KA1507 SBI BANKING AND FINANCIAL SERVICES FUND - DIRECT PLAN-GROWTH
Expense ratio for Direct is 0.87%

I have gone through the above posts and found reply from Zerodha stating that CCI (Clearing Corporation of India) has not accepted Direct plan for collateral of some of the MF.

The list of accepted MF shared by Clearing Corporation (CCI) here is in point no 1.1.2. This list clarifies that CCI has accepted Direct plan (INF200KA1507) which was [shared] for the month of September, 2021. However the same mutual funds of Direct plan is missing in the (Zerodha’s approved list of securities ).

Grateful if you can update the list as per clearing corporation and allow us to pledge some of the direct plans along with regular.

h ttps://www.bseindia.com/downloads1/Eligible_units_of_MF_ETF_towardscollateral.zip

[sunils]

The clearing corporation decides on the approved list. You’re referring to the ICCL approved list, but at Zerodha, we accept all stocks/mutual funds that are listed on the NCL (National Clearing Ltd) approved list. According to the new NCL approved list, INF200KA1507 is not included.