NSE Circular: Updated margin penalty guidelines

[Ankit_Jain3]

@nithin @Meher_Smaran @ShubhS9

Is it possible that you pay the shortfall margin amount to exchange for that case on the 31-12-2024. I will pay the interest that is chargeable to zerodha for the margin amount. In that case we can avoid the margin shortfall penalty. Please try this option because margin shortfall is too high to bear for me.

[dcd]

This is scary. I thought the penalty was 1% of the shortfall? So did you have margin shortfall in crores? How did the RM team even allow it to reach that stage?

[Jyoti_P_Deshpande]

We understand and empathize with your situation. However, these charges are levied by the exchange and cannot be refunded once applied, as they are collected by the exchange.

The penalties are enforced in accordance with the exchange’s circular, and we are required to comply with these regulations.

For the future, we recommend the following to help you avoid such penalties:

1. Maintain sufficient funds in your account at all times.

2. Promptly add funds whenever you receive a notification to do so.

3. If you hold hedged positions, consider closing the leg with higher margins first to minimize the risk of a margin increase.

Our team has shared the detailed break down of the margin shortfall via ticket. Kindly go through it and let us know if you have further queries.

[Ankit_Jain3]

I will seek clarification from SEBI and nse exchange and raise this matter to them.

@Meher_Smaran @Jyoti_P_Deshpande @ShubhS9

[gaurav_choudhary]

@Jyoti_P_Deshpande

f you hold hedged positions, consider closing the leg with higher margins first to minimize the risk of a margin increase.

sometimes margin requirement message comes…when there is excessive loss intraday in live situation…is this scenario also applicable for margin penalty @Jyoti_P_Deshpande @Meher_Smaran @siva @VenuMadhav

[Ankit_Jain3]

SEBI circular says intraday margin monitoring to be effective from April 2025. See section 5.3.3. why are you implementing it earlier ??

SEBI | Measures to Strengthen Equity Index Derivatives Framework for...

[jugador]

@Ankit_Jain3
Can you provide a screenshot or details of the trade taken on 31-12-2024?
So we can all be sure whose fault it is.

[Meher_Smaran]

Hi @Ankit_Jain3

The SEBI circular that you shared here addresses Open Interest limits at a broker level and is not related to individual client margin management.

Deepak Shenoy (@deepakshenoy) on X

@Jyoti_P_Deshpande

NSE recently released a circular that allows brokers to pass on penalties to clients in case of margin shortfalls or non-collection of upfront margins under the following scenarios:

1. In case the check issued by the client is dishonored.
2. Increase in margins due to changes in client’s hedge positions or expiration of one or more legs of the hedge.

So starting November 1, 2024, if there is any upfront margin shortfall that includes these two scenarios, a client will have to pay a margin penalty in such cases.

This is the relevant exchange circular that addresses the margin shortfall penalty due to an increase in margin due to hedge breaks and the expiration of one or more legs of the hedge.

[gaurav_choudhary]

sometimes margin requirement message comes…when there is excessive loss intraday in live situation…is this scenario also applicable for margin penalty @Jyoti_P_Deshpande @Meher_Smaran @siva @VenuMadhav

[siva]

@gaurav_choudhary

sometimes margin requirement message comes…when there is excessive loss intraday in live situation…is this scenario also applicable for margin penalty

Yes, but not considered under upfront margin collections or won’t comes under peak penalty, so one will have time to bring the shortfall or can cut down the position to that extent.

[gaurav_choudhary]

@siva

Yes, but not considered under upfront margin collections or won’t comes under peak penalty, so one will have time to bring the shortfall or can cut down the position to that extent.

in this case if shortfall margin not done till end of the day ( squaring off positions at the end of day only) how much penalty is applicable?

[siva]

@gaurav_choudhary

n this case if shortfall margin not done till end of the day ( squaring off positions at the end of day only) how much penalty is applicable?

If you missed and RMS also din’t close then the penalty will be same as peak penalty, can check here for exact numbers.