Short Allocation of Collaterals Sebi Circular

General
1

Just got this message from my broker based on this circular - https://archives.nseindia.com/content/circulars/CMPT56494.pdf -

As per the recent update in SEBI circular reference No. SEBI/HO/MRD2_DCAP/CIR/2021/0598 dated July 20, 2021, and NSE circular reference No. NCL/CMPT/56494 dated April 26, 2023, on "Short Allocation of Collaterals” we would like to inform you that there will be changes in CNC sell credit in your trading account.

Effective from Tuesday, May 02, 2023, you will not be able to avail CNC sell credit in your trading account on the same day. Earlier, 80% of the sell margin was made available for trading on the same day and rest 20% was kept on hold. However, from May 02, 2023, the CNC sell credit margin won’t be available on the same day to execute trades. These changes will be in effect until the next update.

The interpretation by my broker seems to be very different from what’s mentioned in the circular( or its just to complex for me) and is this change happening to Zerodha also?
And if yes, how exactly is this going to affect us?

@ShubhS9 @Meher_Smaran

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Hi @harsh-sharma, nothing changes for you at Zerodha. You will continue to get 80% of the sale proceeds when you sell shares from holdings, while the remaining 20% will be available from the next day. Just like it is now.

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is this broker finvasia? read abt other brokers. found no chnge

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Hi @ShubhS9

Please can you provide further clarity on this please? How you are able to provide 80% for CNC sell on the same day (T) while few others are providing 100% on T+1 and zero on T day.

Is it interpretation issue or risk management?

Edit: Kotak says it’s as per law and no one is supposed to provide 80% margin on unpledged shares on T day.

It’s important for me to know about this because of how I trade (only cash positional, No F&O). If all clear, I would like to move to you fully. (I already have an account with Zerodha)

Thanks.

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Where is the law?

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@ShubhS9

Appreciate a reply. It’s fine if you are not willing to talk about others but can you write further from Zerodha’s perspective?

As I said earlier, full clarity on this is needed for me before I decide as I don’t want to end up paying penalties or be on the other side of regulations etc.

Thanks for your time.

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Hi @zerodhahero, apologies for delayed response. Have explained this here: There is no immediate 80% equity sell credit in equity delivery now? - #4 by ShubhS9

Btw, if you’re referring to BTST trades, even we have stopped giving credit on same day. Since EPI (Early pay-in) cannot be done for BTST trades. Have explained this here: Discontinuation of credit on sale of T1 holdings w.e.f 19th June 2023

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Thank you so much. I tried searching but couldn’t get your May 3rd post. My bad.

Again, thanks.

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