There seems to be an existing mechanism to take loans against Mutual fund units, probably same can be used for pledging.
In the coin thread and in other posts, @Bhuvan has already confirmed that there is no impact.
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What does this mean for you as a trader?
Traders pledge their mutual funds and raise margins to trade in the F&O segment. In case there’s a debit in the trading account, the Broker will have to resort to invoking the Mutual funds to recover debit in case the client does not clear the debit in time. I’ll post an update at a later date as to how this would work.
What Fyers and 5P are doing, i dont know. Again shows SEBI in very poor light that rules are made in such haphazard ways and we are having this question at 11th hour. Really tired of repeated uncertainty created by SEBI multiple times a year for traders. Sirf Mutual fund sahi hai …
The circular was issued in October 2021. I believe it was brokers responsiblity to take the issue.
Fyers and 5P are small fish in the Sea. Its sharks like Zerodha, Upstox, Groww and others to whom SEBI will listen to. If the sharks doesn’t create the wave then how can small fish do something about it.
Why would I square off the positions if its not true. Thats the reason I am asking for clarification.
There is definitely opportunity cost for me if I have to close all positions and then sell mutual funds and and again take positions once the funds are cleared.
Not true. There are so many like me who pledge debt funds and write options. May be you do not know alot of option writers.
That person asked whats the problem in exiting all positions. I said that if you square off you may incurr losses.
My reply that you have quoted was for @abhijeet1. He replied to my post where I said I would have penalty.
Now quoting his reply which was specifically for me.
I quoted your text and then below that I have just mentioned like how it would affect me.
May be the confusion is because I replied to him directly without quoting his reply.
My bad.
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Ok sure. I started thinking whats wrong in my reply.
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I was only agreeing with you there when you said closing positions will cost traders.
At the same time I also disagree that the writers usually don’t pledge mutual funds.
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Apologies for the delayed response. You will be able to pledge mutual fund holdings. No changes in this. Please check out this post for more details: Discontinuation of pooling for mutual funds and how it affects Coin - #47 by Bhuvan
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