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The following penal charges are levied for failure to pay funds/ settlement obligations:

Penal Charges:

A penal charge will be levied on the amount in default as per the byelaws relating to failure to meet obligations by any Clearing Member.

Type of Default Penalty Charge per day  Chargeable to
Overnight settlement shortage 0.07% Clearing Member
Security deposit shortage 0.07%

Clearing Member

Violations if any by the custodial participants shall be treated in line with those by the trading member and accordingly action shall be initiated against the concerned clearing member.

Short Reporting of Margins in Client Margin Reporting Files:

The following penalty shall be levied in case of short reporting by trading/clearing member per instance.

Short collection for each client Penalty percentage
(< Rs 1 lakh) And (< 10% of applicable margin) 0.5%
(= Rs 1 lakh) Or (= 10% of applicable margin) 1.0%

If short/non-collection of margins for a client continues for more than 3 consecutive days, then penalty of 5% of the shortfall amount shall be levied for each day of continued shortfall beyond the 3rd day of shortfall.

If short/non-collection of margins for a client takes place for more than 5 days in a month, then penalty of 5% of the shortfall amount shall be levied for each day, during the month, beyond the 5th day of shortfall.

Notwithstanding the above, if short collection of margin from clients is caused due to movement of 1% or more in the currency pair - USD-INR only, based on the close to close settlement price of the near month currency futures contract on a given day, (day T), then, the penalty for short collection shall be imposed only if the shortfall continues to T+2 day.

All instances of non-reporting are treated as 100% short reporting for the purpose of levy of penalty.

Penalty and penal charges for margin/limit violation

Penalty for margin / limit violation is levied on a monthly basis based on slabs as mentioned below or such other amount as specified by the Clearing Corporation from time to time.

Instances of Disablement Penalty to be levied
1st instance 0.07% per day
2nd to 5th instance of disablement 0.07% per day + Rs.5,000/- per instance from 2nd to 5th instance
6th to 10th instance of disablement 0.07% per day + Rs.20,000/- ( for 2nd to 5th instance) + Rs.10000/- per instance from 6th to 10th instance
11th instance onwards 0.07% per day + Rs.70,000/- ( for 2nd to 10th instance) + Rs.10,000/- per instance from 11th instance onwards. 
Additionally, the member will be referred to the Disciplinary Action Committee for suitable action.

Instances as mentioned above refer to all disablements during market hours in a calendar month. The penal charge of 0.07% per day is applicable on all disablements due to margin violation anytime during the day.The penal charge of 0.07% per day shall not be applicable on disablements due to limit violation.

Client Level Position Limit violation
A penalty of Rs.5,000/- per violation / per client shall be levied to the Clearing members for every day of violation.

Updated on: 29/11/2019
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