Whether existing pledge form can be used for submitting margin pledge request?
No. A separate Margin Pledge form called ‘Form 43’ needs to be used for submitting margin pledge / re-pledge request.
Whether off market transfer to demat account of Trading Member / Clearing Member (TM/CM) are permitted for margin purposes on or after September 1, 2020?
No, transfer of securities to demat account of the TM/CM for margin purposes (i.e., Title Transfer Collateral
Arrangement) is prohibited from September 1, 2020.
Whether holding of Power of Attorney shall be considered as equivalent to the collection of margins by the TM/CM in respect of securities held in the demat account of the client?
No, holding of Power of Attorney shall not be considered as equivalent to the collection of margins by the TM/CM from September 1, 2020
Can margin pledge be created in any demat account of a trading member (who is not a clearing member for any segment)?
A TM who is not a CM, should open demat account under sub-type ‘TM – Client Securities Margin Pledge Account’. Margin pledge of securities can be done in such a demat account.
For a TM who is also a CM for one or all segments which type of demat a/c should be opened for margin pledge purpose?
A TM who is also a CM may open demat account under sub-type “TM/CM – Client Securities Margin Pledge Account’ and client securities pledged in the said account can in turn be re-pledged with CM (in its capacity as a TM) or CC (in its capacity as a CM) for providing collateral in form of securities as margin.
Which type of demat a/c should be opened by a clearing member to take re-pledge of securities from a trading member for margin pledge purpose?
A CM who wants to take re-pledge of securities from a TM may open demat account under sub-type ‘CM – Client Securities Margin Pledge Account’ and client securities re-pledged in such account can in turn be further re-pledged with clearing corporation (CC) for providing collateral in form of securities.
Whether client can margin pledge the securities directly to clearing member?
No. Client can initiate the Margin Pledge either to the ‘TM – Client Securities Margin Pledge account’ or to the ‘TM / CM – Client Securities Margin Pledge account’.
Whether any stamp duty would be applicable in case of Margin pledge transaction?
In case of Margin Pledge invocation, stamp duty would be applicable and payable before the execution of invocation of the Margin Pledge by the concerned trading member / clearing member / clearing corporation.
Whether my stock broker can transfer the funded stocks to ‘Client Securities under Margin Funding Account’?
No. The funded stocks can be held in ‘Client Securities under Margin Funding Account’ of trading member only by way of margin pledge.
Whether execution of margin pledge of funded stocks in ‘Client Securities under Margin Funding Account’ would require OTP confirmation from the client?
Yes.
Whether OTP confirmation would be required if the securities are being re-pledged?
No.
How will the OTP confirmation by client for margin pledge work?
On receipt of margin pledge instruction either from a client or TM (based on the POA), a link to ‘Confirm Margin Pledge Transactions’ would be generated and sent by NSDL through SMS on registered mobile number and registered e-mail id in the demat account of a client. On clicking the said link, client will be redirected to a web page where client will be authenticated with “PAN” (not applicable in case of PAN exempt clients), After authentication, client will be displayed the details of outstanding margin pledges for the specific TM and client can generate the One Time Password (OTP) through the same link and OTP will be sent on the registered mobile number and registered e-mail id of the client. On OTP authentication, margin pledge transaction would be processed further.
What is the significance of Unique Client Code (UCC) for margin pledge transactions?
Margin Pledge instruction can be initiated in favour of a trading member only if the UCC allotted to the client by trading member is linked in the demat account of the Client. Validation of the margin pledge instruction will be done with the UCC database (i.e. Client UCC, TM ID, Segment) which is linked in the demat account of the Client.
Whether the margin pledge instruction can be given electronically?
Yes. Margin pledge instruction can be given electronically through NSDL e-services – SPEED-e platform.
How the OTP for Margin Pledge confirmation will be sent to NRI clients?
OTP will be sent to NRI clients at email ID registered in their demat account.
Whether re-pledge transactions will be shown in client’s demat account statement?
Yes. Margin pledge and re-pledge transactions shall be shown in client’s account against each security provided as collateral to a TM, and in whose favour i.e., TM / CM / CC.
How will the margin pledge/ re-pledged securities be released?
Client can initiate release of margin pledge request for the securities pledged/ re-pledged with TM/CM/CC. Alternatively, TM/CM/CC can initiate a unilateral release of pledged/re-pledged securities.
What are the charges payable to DP for margin pledge? Whether the pledge charges as applicable currently would apply to margin pledge also?
You may find the charges payable to your DP for margin pledge and re-pledge transactions from your DP.
These charges may be different from the charges payable for pledge. Charges that are charged by NSDL to DPs are available at https://nsdl.co.in/about/charges.php