What happens when a pledged stock in your holdings moves out from your pledge list that you maintain here.
e.g. take SUVENPHAR - You can see that it is pledged but I am unable to pledge additional quantity I bought recently. This is when I noticed that it is no longer in your pledge list.
So the question is does the collateral margin decrease when stocks move out of you pledge list? Or will the collateral margin provided honoured from the point in time when it was pledged? Or this is just a mistake and it is temporarily not visible in the pledge list and will be fixed soon?
Note: In cases where a stock you have pledged is moved under ASM, you will no longer be provided collateral margins for that stock, because, as per ASM 100% margin should be levied. The collateral value (shown on the trading terminals) will reduce by the value of collateral received against that stock.
That particular stock (SUVENPHAR) was added to ASM on 26th April 2021.
I think this off-market action - “stock moving to ASM list” qualifies for a trigger email that informs clients who are holding the same stock - collateralised. For this can dearly impact their margins the next day. A nudge email maybe … isn’t it?
Hi,
My question is why it is not available in this list.
This is approved security from NSE as per my knowledge still Zeordha not allowing us to pledge ?
Isn’t it obvious? If you are in the business of giving loan/margin against collateral, you would like to have something in return, whose value when goes below a set mark, can be easily liquidated and ensure you don’t bear further loss. YESBANK being in lock-in cannot be liquidated and hence probably not in the pledge list.
However, it is a whole new question if a brokerage house is obligated to extend the collateral margin for the approved list set by NSE. @Shruthi - Are you?
The shares available for pledging are as per the list of securities approved by the clearing corporation and at Zerodha’s discretion based on the risk associated with stocks. As of now, you will be able to pledge only those stock which is available in the list.
I am with you @Shruthi on this. The shares available for pledging are based on the list of approved securities by the clearing corporation. It is the discretion of the broker that depends on the risk associated with the stocks.
The collateral margin can change from time to time and if the clearing corporation stops giving out collateral or if the haircut increases to 100%, we won’t provide it either. We are setting up a notifier to inform clients where the haircut increases to 100%.
For now you’ll have to check the approved list to see if the haircut has increased to 100% or the NSE website to check the Applicable Margin Rate of your pledged stocks. Also, the collateral margin will be shown separately in the Funds tab on Kite, under the collateral heading. You need to keep a tab on this.
I suggest we get a mail or notification when a stock or fund that we have pledged is moved out of the approved pledge list so that we can adjust our positions accordingly.
Imagine one day all money market funds are removed from approved list. I will have penalty for 1lakh for sure.
@siva-reddy tagging you because I do not know who looks after these things at your end.
@MohammedFaisal@siva-reddy
Can you hep with this - Ticket #20240225430683
Suddenly I got an email saying 667GS2050 and 716GS2050 are being un-pledged. I have significant holding of this 2 as cash component, and other GSECs I hold are not being un-pledged. Any reason why these 2 alone are being un-pledged?
" You are holding XXXX shares of 667GS2050 that are currently pledged for margin. The clearing corporation has stopped providing margin against the shares of 667GS2050 and has removed it from the approved list of securities for margin pledge. Hence, your pledged holdings in this security will be unpledged and released in your demat account on 2024-02-29.
Please pledge any securities from the latest approved list of securities for margin pledge, or add funds to maintain your open positions, if any.
"
The main reason behind this happening is that NCL (NSE Clearing Limited, aka the Clearing Corporation) has stopped accepting these securities as collateral from 1st March 2024. This can be verified by checking the exchange’s circular regarding the same (circular link - Annexure 4)
This has not only impacted those 2 securities. If you check the previous month’s circular (circular link, Annexure 4) and compare it with the current month’s circular, the following G-Secs have been removed -
S.No.
ISIN
Security Description
Maturity Date
1
IN0020190024
7.62% G.S. 2039
15-Sep-39
2
IN0020100031
8.30% G.S. 2040
02-Jul-40
3
IN0020110063
8.83% G.S. 2041
12-Dec-41
4
IN0020120062
8.30% G.S. 2042
31-Dec-42
5
IN0020190040
7.69% G.S. 2043
17-Jun-43
6
IN0020130079
9.23% G.S. 2043
23-Dec-43
7
IN0020150044
8.13% G.S. 2045
22-Jun-45
8
IN0020160068
7.06% G.S. 2046
10-Oct-46
9
IN0020190032
7.72% G.S. 2049
15-Jun-49
10
IN0020200054
7.16% G.S. 2050
20-Sep-50
11
IN0020200252
6.67% G.S. 2050
17-Dec-50
12
IN0020160092
6.62% G.S. 2051
28-Nov-51
We had reached out to the CC regarding this matter and we got a reply that these securities no longer form part of securities eligible for pledging at the CCIL level and hence have been removed by NCL as well. The CCIL list is available at this link (which also has these securities removed). Will update here with the exact criteria that were violated that caused these securities to be removed.
