Liquid Bees cash equivalency

Dear Nithin,
I have few questions. I hope you can clarify.

  1. Is cash equivalency of liquid Bees prerogative of brokers or can customers demand it? That is, is mandatory for brokers to allow trade in FnO without deposit of 50% cash?

  2. Is there any such notice/ any circular by NSE/BSE/SEBI etc?


From this link

The total liquid assets comprise of the cash component and the non cash component wherein the cash component shall be at least 50% of liquid assets.

But Liquid bees is equal to cash when provided as collateral. But it is hugely inconvenient to liquidate in case of losses. Losses to the exchanges have to be paid same day, whereas liquidbees gets realized in cash only the next day. So if liquidbees were pledged and margin given 100%, brokers would have to put up their own capital when there are MTM losses.

Hence brokers might ask to keep some cash portion to make up for any daily MTM even in case of LiquidBees. It is brokers prerogative. The traditional ones who charge a delivery brokerage for this liquid bees sale transaction, wouldn’t have a problem doing this as their earning from brokerage will be much more than funding the loss overnight.