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Margins for institutional deals


Institutional businesses i.e., transactions done by all institutional investors are margined from T+1 day subsequent to confirmation of the transactions by the custodians. For this purpose, institutional investors include

  1. Foreign Institutional Investors registered with SEBI. (FII)
  2. Mutual Funds registered with SEBI. (MF)
  3. Public Financial Institutions as defined under Section 4A of the Companies Act, 1956. (DFI)
  4. Banks, i.e., a banking company as defined under Section 5(1)(c) of the Banking Regulations Act, 1949. (BNK)
  5. Insurance companies registered with IRDA. (INS)
  6. Pension Funds registered with PFRDA (PNF)

Levy of margins:

  1. Institutional transactions are identified by the use of the participant code at the time of order entry.
  2. In respect of institutional transactions confirmed by the custodians the margins are levied on the custodians.
  3. In respect of institutional transactions rejected/not accepted by the custodians the margins are levied on the members who have executed the transactions.
  4. The margins are computed and levied at a client (Custodial Participant code) level in respect of institutional transactions and collected from the custodians/members.

Retail Professional Clearing Member:

In case of transactions which are to be settled by Retail Professional Clearing Members (PCM), all the trades with PCM code are included in the trading member's positions till the same are confirmed by the PCM. Margins are collected from respective trading members until confirmation of trades by PCM.

On confirmation of trades by PCM, such trades are reduced from the positions of trading member and included in the positions of PCM. The PCMs are then liable to pay margins on the same.

Updated on: 01/10/2019
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