Understanding the new margin pledge system — effective Aug 1, 2020
Check this bulletin for updates
The three principal objectives stated under SEBI’s preamble are:
- To protect the interests of investors in securities;
- To promote the development of the securities market; and
- To regulate the securities market.
If you’ve been following the actions of the market regulator closely, you’ll notice a spate of regulations introduced in recent years, all conscientiously aimed at protecting the interest of investors. From reporting of client level cash & bank account balance to standardising leverage across the industry, all steps culminate in achieving the three principal objectives listed above. The new pledging mechanism too is aimed to further safeguard investors.
A brokerage is the custodian of client funds & securities. When you transfer funds or stocks to your broker, you’re entrusting him/her with the responsibility of handling these assets without any prejudice. That said, there still are reports of brokers misusing client funds and/or securities entrusted to them. In the aftermath of these episodes, SEBI has taken further steps to strengthen the regulatory framework which has led to the genesis of the new pledge-unpledge system for stocks.
When you want to trade with your broker, you need to maintain margins for your trades. Margins can be in the form of cash or stocks. Transferring cash is straight forward. As far as stocks are concerned, today, when a client wants to pledge his stocks to obtain margins, he has to transfer securities from his account to the broker’s account. The broker then pledges these securities to the Clearing Corporation. This transfer of title (ownership) of the securities leaves a gaping hole in the system, allowing (certain] brokers to misuse these securities.This problem was addressed by introducing the new pledge system that will go live from August 01, 2020.
In the new pledge system, the stocks don’t leave the investor’s demat account, instead a pledge is marked in favor of the broker. The broker is required to open a separate demat account labelled ‘TMCM – Client Securities Margin Pledge Account’ for this purpose (TMCM stands for Trading Member Clearing Member). The broker then re-pledges these securities in favour of the Clearing Corporation and obtains margins.
Some of benefits of the new pledge system are as under:
- No misuse of securities: Since stocks don’t leave the investor’s account, there’s less chance of misuse of securities. Also, it wouldn’t be possible to pledge one client’s stocks to offer margin to a different client.
- Corporate actions: In the existing pledge system, since the stocks are held in the broker’s collateral account, the broker is the recipient of all cash and non-cash corporate actions like dividends, bonus, rights, etc. While the broker is required to voluntarily transfer these benefits to the investor, a non-savvy investor may miss out on claiming such credits in the event that the broker doesn’t.
- Pledge allowed for all approved securities: Some brokers (including Zerodha) don’t accept pledge of all instruments allowed by the Exchanges. For example, certain liquid funds pay dividends in the form of more units of the same fund. The operational nightmare around reconciling the dividends received and transferring them to the investors has held us back from accepting these instruments as margins. Going forward, since the stocks are all held in the client’s own account, any approved security will be accepted for pledge.
- Facility to sell pledged stocks: This is a feature we’re working on making available, allowing you to sell pledged stocks without having to request for unpledge and wait until they are received to your demat account. With the new pledge system it becomes much easier to deploy this. This covers the risk from market movements in the stocks you’ve pledged.
What will be the process at Zerodha going forward?
We’ve largely kept the process unchanged, except having to add a few additional steps whereby a client is required to authorise the pledge by entering an OTP on CDSL’s website, just like the TPIN based pre-authorisation for selling stocks. Since CDSL is still working on building full fledged APIs, the investors will have to access this link through an email sent to them to enter the OTP and authorise the pledge. The process is explained below:
- Log into Console.
- Go to the Holdings page. A list of stocks that can be pledged is displayed here.
- Select the stock you wish to pledge, enter the quantity, and click on pledge.
- CDSL sends an email to your registered email ID with a link to approve the pledge
- Upon visiting the link, an option to generate OTP is given. This then sends an OTP to the registered phone number & email ID. Enter the OTP on the CDSL page to approve the pledge.
- Once the pledge is approved, margins will be provided against the pledged stock from T+1. Once the full fledged APIs are available, we’ll work at providing near real-time margins against pledge.
- To unpledge, simply visit the holdings page and request an unpledge. The stocks will be unpledged from the Clearing Corporation (provided they aren’t blocked for margins) that is the lien on the stocks will be unmarked and the stocks become free securities in the demat.
The fee for pledging will continue to remain the same. This is because there’s a cost levied by the depository to create the pledge and re-pledge. Additionally, also note that as a client you’ll have to continue maintaining positions in the cash:collateral ratio of 50:50, failing which interest will be levied. If you fail to meet your margin obligations, the broker will have the right to invoke the pledge and sell them to revoke the dues.
All new pledges will have to be created through the new pledge system effective August 01, 2020. Brokers have been given time until the 31st of August to return all securities pledged using the existing framework and route them through the new pledge system. In due course, we’ll communicate the process of un-pledging to you. Please ensure to maintain sufficient margins for the positions you’ve taken.
Update: SEBI, vide this circular has allowed the present system of margin pledge to be available till the 31st August 2020. The new pledge system will be made live soon and in due course, we’ll communicate the process of un-pledging to you.
sir i want to transfer my groww share to zerodha . but when i am adding beneficiary it shows beneficiary transaction for off market transaction is not present for input demat account number ,when i enter grow bo id.
Hi Zerodha, I have pledged some equity shares to get margin. For any corporate actions – bonus, dividends payout, do I need to follow up everytime with your team to transfer the same to my account or will it happen seamlessly?
Thanks
Surya
Hi Surya, could you please create a ticket on: https://support.zerodha.com/ with details of the issue, so we can have this resolved at the earliest?
currently i am using this margin for position stock option selling…my question is can i use this for positional future buying?
Hi, the scripts AVANTEL6, IDEA and POCL do not show on the pledging page. As such I am not able to pledge them. May I know how can I do that? Thanks
Are there additional pledging charges when I pledge additional quantity of the shares of which certain quantity has already been pledged.
For eg. I have pledged 50 shares of SBIN and have been charged ₹30 for it. After a few days/weeks I want to pledge additional 50 quantity, so will I be charged ₹30 again or there will be no charges since I already have pledged securities of that share.
Hi Deepesh, yes, this will be considered as seperate pledge request and pledging charges will be applicable.
Are there additional pledging charges when I pledge additional quantity of the shares of which certain quantity has already been pledged.
For eg. I have pledged 100 shares of SBIN and have been charged ₹30 for it. After a few days/weeks I want to pledge additional 50 quantity, so will I be charged ₹30 again or there will be no charges since I already have pledged securities of that share.
Do Zerodha charge any interest on pledging an equity share, i have pledged a share for F&O margin but never used it for any F&O yet, do zerodha charge any intresest per month or year.
Hi Hari, the cost of pledging is ₹30 + GST per instrument, irrespective of the quantity pledged. There is no interest charged for using the margin. However, in case there is a shortfall in the cash margin requirement for overnight positions, and it is funded by non-cash collateral, a delayed payment charge of 0.035% per day or 12.775% p.a is applicable on the shortfall in the cash margin requirement. More here.
You are still living in 1920 ! Redo this .
I had pledged sovereign gold bonds with Zerodha from my demat account. Before pledging I receive interest of the gold bonds in my bank account linked with the demat account. Will I get the interest of SGB in my bank account after pledging the SGB same as I get before pledging the SGB?
Also please tell about the dividends of the shares if pledge the shares of the company?
Hi Manuj, yes you will still receive interest from SGBs and dividends from shares if pledged since they remain in your demat account.
Hi,
Is it mandatory to enable margin pledge for a demat account to gift a share ?
Hi Vinayak, no it isn’t.
what will happen , say case this one…. i request for pledge of 200 shares on sunday, on monday morning i sold 50 shares and then received the pledging completion mail from zerodha at afternoon….but i pledge for 200 share now i have only 150 share….what to do now…
so if one pledges shares and get 1 lakh loan from Zerodha, which one reinvests further into the market. If one has capital gains, can one reduce the gains by deducting the interest paid on that loan as I see that as an expense to acquire the stocks which has resulted in capital gains?
Hi, you can post taxation related questions here.
Unable to proceed with pledge approval at CDSL. Following is the error message “Margin pledge set up is not present for input PAN No.” Kindly advise
Hi Shilpa, could you please create a ticket at support.zerodha.com so our team can check and assist?
Hello, having pledged some equity MF earlier, i am already getting som eexposure, just to add on, I pledged some more, though I got a messsage from CDSL, when i input my PAN And folow the instructions, i get a message ”Margin pledge set up is not present for input PAN No”. So am not sure what else should i do. Meanwhile all the pledged qty shows as ‘pledged’ in ZDha portal but there is no increment in my exposure collateral. Pls advise
Hi Sanjay, could you please create a ticket at support.zerodha.com so our team can check and assist?
After getting loan against sequrity
Do we hv right to give instruction to sell pledge share to clear interest every month or to clear outstanding full loan amount when ever we want
Hi,
I have a question about the margins provided on the pledged shares/mutual funds. Does the margin increase/ decrease automatically basis the value of the pledged asset on a real time/daily basis or do i have to unpledge and repledge to get the updated margin amount?
TIA
Sreejith
Hi Sreejith, the collateral amount received is calculated from the previous closing price of the securities after the haircut. If the value of the security pledged increases, the margin too will increase, and vice-versa if the value decreases. You don’t have to unpledge and pledge the securities again.
I am.not able.to authenticate my pan it gives an error “Margin pledge set up is not present for input pan no”
Hi Deepika, our team has responded to your ticket. Please login to support.zerodha.com and check. For further assistance, you can reply to the same ticket.
I have pledged my IPO allotment of 6 shares of PAYTM – Investment cost Rs 12000+. Today I have purchased 25 shares @ 556+ and intend to purchase in dips/rise for a target of 680 which would nullify my loss instead of tax harvesting. My question. In case the market goes sideways or bears take control because of the Adani scam can I sell the the shares for a meagre profit without touching my pledged shares6 @ 2150. My opinion is that it should not be touched since FIFO is not applicable for pledged shares as far as I know as a banker. Please reply early.
Hi Venkataramani, the pledged quantities are considered for selling first, even if the quantities are meant to be sold from the free holdings. However, the quantities will be debited from the free holdings only at the end of the day, and the collateral margins and pledged quantities will be restored the next day.
Explained here. We also see that you’ve created a ticket on this same query. You’ll have an update on the ticket shortly.
I understand. But my point is that if the6 pledged shares are taken first and then replaced by the free holdings, then my realised profit will be in the red. A big loss. If not it would be a profit. That’s my concern and my profits have never been inthe red for thepast 20 years yearwise.
Second replacing it only at the quantity level or both the quantity and price level also. If it is quantity there would be no issues with pledged shares showing 6@2150 but it is shows 6 @ a lesser average price my net realised gain would be show a real loss and not book loss. I just now saw your reply . But today I purchased another lot of 20 shares ,converted into CNC and with doubt in my mind by sold the same which would definitely be taken as intraday transaction and not affecting my pledged shares. I could not find a clear cut circular regarding “Extra Purchase and sale of the same shares with old ones pledged earlier”.
Third, how can the pledge be released without my consent unless there is a breach of margin.
We’ll have someone from our team reach out and assist you regarding this.
Any interest will be levied on my pledged margin?as the pledge amount considered as a loan.
Hey Ratheesh, there are no charges for using collateral margin. However, exchanges stipulate that for overnight F&O positions, 50% of the margin needs to come in cash & the remaining 50% can come from the collateral margin. If you use collateral margins above 50% interest is charged at 0.035% per day. You can learn more on this here.
Hello Zerodha,
Can i use my pledged money of doing trading in intraday (MIS) on Nifty and banknifty ? if so how much funds i need? can i use 100% margin? please help
for ex: i buy nifty 22nd sep 17600 CE and sell the same on same day.
regards
For intraday f&o can we use 100% collateral for trading ,with zero cash
Hey Joel, for intraday trades you can use 100% collateral margin. The 50:50 Cash – Collateral requirement is for overnight positions.
The 50% cash margin for overnight can come through pledging of liquid funds OR does it need to be pure cash?
Hey Viraj, this can come from cash equivalent securities as well, such as liquid funds, G-Secs, SGBs et. You can check the list of all the cash equivalent securities here.
Suppose zerodha defaults on some loan that it had taken for carrying its business. What will happen to the pledged holdings of the customers in such a scenario? Can those be liquidated by zerodha to pay its debts? Does it matter whether the customer had submitted PoA or not?
Is there any specific time limit for using pledge money
Hey Shilpa, there’s no such limit. You can keep the shares pledged as long as you want and use the margin.
Is it necessary to unpledge a script once in a year or we can continue that pledge for more than one year.
Hey Dinkar, you can keep the shares pledged for as long as you wish 🙂
I have liquid fund of Rs 5 lacs with Zerodha. I want to pledge this and get margin for commodity trading. How to do it.
I have been calling since many days but could not talk to zerodha representative despite entering right support code and it was always stated that entered code is incorrect. Is there anyone in zerodha to address it. Really very disappointing. Kindly help.
Hey Shashi, sorry to hear this. Currently, you cannot pledge securities to get collateral margin for trading in the Commodity segment, you will have to use the cash balance. We’re working on merging both equity and commodity segments, post this you should be able to. Will keep you posted on it.
I have pledged share to get additional margin. My account shows the additional collateral margin and a seperate cash margin also. When I try to do the trading activity – zerodha gives me only the available cash margin.
Beyond that it flags the red message that there is no margin and I am prevented to take the trade.
I can not understand how is the coollateral margin going to be useful?
What purpose have I achieved by pledging my shares ??
Please guide.
Hey Sanjay, could you please create a ticket at support.zerodha.com with more details, so that our team can have this checked and assist?
If I pledged my shares for margin and use it for Intraday Equity and if my SL gets hit then am I suppose to add funds immediately or it should be done while unpledging the shares??
Will zerodha sell square off my stock holding immediately let say for the SL of 500??
Hey Pranav, you will be given time to add the funds to your account in case your account results in debt balance. If you fail to add funds, then the pledged shares will be unpledged to clear the debit amount. You can check out more details on this here.
When trying to approve pledge through CDSL site, I get errror Margin pledge set up is not present for input PAN No.
What do I do to fix it?
Hey Kalyan, please create a ticket at support.zerodha.com so that our team can check and assist.
Sir,
Is it necessary to pledge shares etc if I’m buying them with my own moneys available in my wallet. Jai Hind!!!
Hey Rajeev, it is not necessary to pledge shares. However, if you trade in Futures and Options, you can pledge the shares you hold for collateral margin which can be used for intraday equity, trading futures, and shorting options. More on this here.
Can i pledge a direct equity or debt mutual fund purchased through zerodha for the collateral?
i have two simple queries which I will appreciate if answered by Zerodha Team asap as the same facilities are available with other brokers but by reading all the queries I understood that these are not available with Zerodha
1. Can i sell my pledged shares if they are not used in margin trade.
2. I can carryover f&o position overnight against 100% collateral margin.
Please reply
Can I use pledged margin to trade equity intraday
I have questions regarding capital gains for pledge and unpledge of shares. For example I bought TCS 1000 shares @2000rs price on 01-Apr-2020 and later I pledged them on 10-May-2021. After two months 10-July-2021 unpledge and sold at price 3500rs a piece.
What will be considered this transaction LTCG or STCG? Pls elaborate
After pledging of shares broker get bank bankrupt and broker house get closed then what append with my pledge shares ? After pledging shares where is stored my shares in broker acc. or in my acc. ? and pledging of share is safe or not?
Is the margin amount increase / decrease as per share price movement or will stay same value of what received at the time of pledge?
Dear sir,
I pledge liquid bees and get cash equivalent as a margin.
suppose i have 3 lakhs cash and 5 lakh is in pledged margin, if i take position of 2 lakh (Future buy and option sell) which one is used for the position?
Let me clear i am not asking M2M ..
I have one doubt.
Suppose I have pledge some stocks and for example I get collateral (Equity) margin of 2 Lakh. So how much money can I utilize from this 2 lakhs for option selling and buying in intraday. ?
For example, I have 100 quantity of a stock, initially i pledged 50 quantity and later i pledged another 50 qty after week
How much Zerodha will charge for this 30 or 60 ???
The margin we receive in pledging of stocks, does it attract any rate of interest too?
if i pledge liquidbees worth 1 lakh i should get 92000 with 8% haircut which could be used for option selling /future trading. would like to know if i could place and iron condor / iron fly which will be requiring approx 65 k with 30 k cash available on hand. just want to confirm as only with 2 buy sides i could make a strangle or straddle worth 1.5lakh to 65 k with margin benefits.
If I pledge and get say 1,00,000 as Margin against Stock.
I also have another 1,00,000 as Cash Margin
If I perfectly maintain this 50% Stock: 50% Cash level
Will I be charged any interest by Zerodha?
Not that I am not grateful for everything that Zerodha has done for the community but just wanted to ask when will Zerodha allow to sell the pledged Securities?
When shall we get the facility to sell pledged stocks, allowing to sell pledged stocks without having to request for unpledge and wait until they are received in my demat account ?
Are pledged SGB’s considered towards the cash component of margins?
How you can ask customer to activate FnO if they want to pledge shares for margin. I want margin for intraday trading and I don’t want to go for FnO trading. Earlier I pledged the shares and now the same shares are not allowed to pledge because I have not activated FnO.
Hello, I want to know that, if I pledge shares , can I freeze those shares from cdsl freeze option
Why ETFs that track nifty50 like ICICINIFTY or KOTAKNIFTY are not available in the approved list of ETFs that can be pladge?
For LiquidBees there is no 50:50 split right?
Whole amount will be used, correct ?
How to pledge Tata motors Dvr shares? no option available fot it to pledge it.
Hi..
1) In Cash-component sheet we have several schemes of Mutual funds as well. Will you consider these all mentioned Mutual funds as good as cash (like liquid bees-ETF) to use full amount as collateral without 50% cash maintenance??
2) Do we need to have Mutual funds with Zerodha only (kite) or can i invest anywhere else (Direct through Mutual fund house site/CAMS) to use for collateral purpose?
3) ELSS schemes considered or not?
Point 2 – You need to invest via Coin (Zerodha) to use as collateral, other modes are not available
Point 3 – I’ve invested in DSP tax saver, I couldn’t pledge it
I invest in direct MF. Can i pledge my MF NAVs? How to link MF with zerodha console? Is it necesary to invest via coin to get this facility?
Your holdings should be in Coin (Zerodha)
Only then you can use them for pledging
Also not all schemes can be pledged
Refer list provided by Zerodha
I have shares worth 1.3L and after haircut the value is 88000.
So can you please answer the following question?
1) Suppose I have 2000 rupees free cash in my Zerodha account and i pledge my 1.3L securities. So will I be able to take trades for 90,000 rupees?
2) With my 88000 rupees collateral, how much value I can trade in FnO provided I have only 5000 free cash,i.e. 88000(collateral)+5000(free cash)?
3) Can i take following position:
a) FnO option buy worth 90,000(88000 collateral+2000 free cash)
b) Intraday equity cash position
c) Positional short term delivery equity cash
d) Option writing
4) How much money i have to put extra to trade an option writing which asks of 100000 margin and I have 88000 collateral only.
5) Will I be allowed to take trades purely on basis of collateral, provided I m ready to pay any additional interest/charges.
Suppose I want to do option writing in intraday which need 80k margin. I have 88k collateral and 2k free cash. As per rule I need to at least have 40k free cash to trade 80k FnO but can i still take position If on remaining 38k(40k shortfall and 2k free cash) I am ready to pay interest?
The answers for irst two question as I understand are as nelow:
a) Total trades you can undertake : only Rs.4000/- . Cash: cllateral is to be maintained at 50:50. Since you have a free cash o Rs2000 , add another two thousand from colateral and thus total 4k worh is available to you for trading.
b) like above Rs10000/-. Rs 5000 free cash and another Rs.5000/- from collateral.
I am not able to understand the below statement. Can anyone please explain in a layman’s language?
“Additionally, also note that as a client you’ll have to continue maintaining positions in the cash:collateral ratio of 50:50, failing which interest will be levied. If you fail to meet your margin obligations, the broker will have the right to invoke the pledge and sell them to revoke the dues.”
Selling pledged stocks when will it be available all other brokers like 5 paisa and iifl have already given this facility
It have been more than 4 years and still they not enabled their system to allow this. It seems its intentional and moreover they stopped answering to such question public forum.
Since you have stated that cash: collateral should be in the ratio of 50:50, why don’t you reject the order at the placement stage itself rather than allowing the order to get executed and then charge penalty by way of interest? Is it not unethical business practice?
Post pledge, for Equity Intraday also do I require to have 50% cash upfront or is it only applicable for Future trade?
I have got a link from CDSL to authenticate the pledging of shares through OTP.
I want to know –
1. What will happen if I don’t authenticate it. Whether I would be able to trade through my trading account or not. I would like to mention that I don’t want to get any leverage from broker and I always buy shares from my own fund.
2. From now if I have to sell my shares , how much fund balance I have to maintain in my trading account and for how many days?
Will you please reply to my
queries?
Thanks
Explained here.
”Margin pledge set up is not present for input Demat Account No.”
The above message is popping out when I am approving pledge requests through the link provided by CDSL.
Please tell me how to resolve this
Hi
I am getting the same error, can you please let me know who to fix this issue ?
Regards
have you found any solution yet ? I am getting the same error
Hi Raushan, please create a ticket at support.zerodha.com with the details of the issue. Our tema will check and have this resolved at the earliest.
Hi
If I pledge shares, is there any specific time period to unpledge shares before that?
example: if I pledge shares on 1st of march.. can I unpledge them on 1st of april?
How many days we can keep the collateral amount in account (without unpedging). Do zerodha takes any charges for that ?
”Margin pledge set up is not present for input Demat Account No.”
The above message is popping out when I am approving pledge requests through the link provided by CDSL.
Please help
To sell index option how much margin I can provide through pledge or what is the requirement of cash margin.
Can I provide whole margin through pledge.
I want to commodity futures trading with this amount in carry forward. Will it be allowed with funds granted by pledging other shares
What a response when I call Zerodha support some one answered after 30 minutes holding the phone and he said close the console open back it will work. before I try he cut the phone line.. Very sad
I couldn’t Pledge my holdings Bharath bond EBBETF0425, please someone help.
Will margin from SGB’s considered as cash equivalent? Maintaining 50:50 cash and collateral is not needed right?
While trying to pledge I received an error message saying that the maximum limit of shares which can be pledged has reached. What can be done anout this ? The limit pertains to the number of shares or the amount ?
IS the new system of unpledged live or will take more times?
kindly clear this, so according we can take a decision .
Earlier it used to be the case that at the end of every quarter, the shares need to un-pledged and re-pledged again. Are we continuing with the same process? Please reconfirm whether we need to do the same at the end of every quarter?
How will Liquidbees be treated in the new system.After selling them will we have to wait for T+2 days for trading against them?
Recently I have shifted from ICICI direct,I have two quotions.
1. why Zerodha is asking for double margin on future derivatives before 2 days of expiry.
2. Suggest to show margin used for current position and show web triggered price based on avialable margin.So that we may increase or add margin
I have 1334(2 lots) shares of SRTRANSFIN in my account which are already pledged. I have sold call options for 2 lots which are ITM currently. I would like to give delivery of these shares at the end of expiry. Do I need to do unpledge these shares ? Or will the call option be exercised without making any modifications.
I’ve 110 shares of EBBETF0431F (Bharat Bond) when i try for pledging i am getting a failed message as mentioned
“EBBETF0431F(INF754K01LE1) cannot be pledged. Maximum Qty of shares that can be pledged at trading member level reached.”
So far i didn’t have not pledged securities and this is the first time, Can you tell me the reason and also telll when i will be allowed to pledge this security.
Hey Rishi, exchanges limit the number of shares for a particular scrip that can be pledged per broker as well.
I am getting the same error message while trying to pledge NETFLTGILT. I am able to place pledge request for all other securities except NETFLTGILT. Kindly explain how these limits work.
Hey Prashant, we’ve explained the reasons for rejection in this support article.
Waiting for implementation of the facility to sell pledged stocks without going through the unpledge process which takes a day resulting in a lost opportunity. As a leading brokerage firm it would be great if this is made available at the earliest.
Just want to know 1 thing
can we use margin against pledged shares for taking new delivery or not
Hi,
If I have pledged my ETFs to buy shares, can i pledge the bought shares again, say, to do options trading?
Where can I find the complete list of approved stocks for pledging along with the percentage margin given?
Hi,
I just got to know about the Pledge system today and wondering what this is all about and what am i supposed to do. Here is the story.
I have only stocks lying in my demat account and i have not maintained any cash in the funds. Please confirm what all actions i am supposed to do?
– Do i need to deposit any cash in my funds? If yes, how much
– For the unpledge/repledge, what is the process & how much charges will it levy? I have about 3 lacs worth stock, with the new system, how much money will be charged in the process?
We are waiting for the facility to allow us to sell pledged share directly without waiting for unpledge. Sometimes we have F/o position against pledge, which we don’t want to square-off but want to sell pledged stocks at the same time.
Sir. I request you to kindly let me know if I can use the collateral margin for covering mark-to-market losses.
I have apply for pledged on 08.09.2020. But otp not received till yet
Hi,
Can we have the bracket orders back with higher margins if required?
It helps us to be more disciplined as if have to enter target exits and stoploss. Thanks.
So frustrating to be with Zerodha. We understand this is a pandemic time but You should know you are a stockbroker, not a grocery shop that I can buy stocks from others if you are unavailable. Why so huge call waiting?? Trying to contact zerodha since the last 2 months but no LUCK. its been 7 months now. why haven’t you hired enough resources to help your clients?? It’s all about money.
Can we pledge share for intraday buying only??? Or we can pledge and buy stocks for BTST or Swing trading??? Please advice….
I pledged some shares of xyz company, not utilising the margin that mean no F&O position.
Case 1 : Due to some sudden rally, I sold the shares without unpledge it. What will happen?
Case 2 : I sold shares and placed unpledge request simultaneously. Because delivery is T+2 and unpledge is T+1. Will it work?
I am existing Zerodha client for more than 5 years. Using pledge/unpledge system for couple of years.
Now, with new system, Pledging is working fine, but unpledging IS NOT WORKING.
Raised unpledge request on Sep 03, 2020, but it is still pending. Created support ticket #20200904940285 on Sep 4, 2020, but support team is not able to resolve.
Pl resolve it ASAP, as I am not able to exit this positions.
sir how i can short shares in intra day if i am not holding shares in my demat account and in account i have Rs.50000/- so how much exposure i will get can i buy it on same day?
How much fee can be collected by Zerodha on pledging the stocks ??
What is the percentage of haircut on the pledged equity shares?
It is different for each stock. You can see the full list here.
Zerodha yet to provide facility for live sell of pledged securities by client without going through unpledging process. Clients are at a disadvantage to miss out any short term spurts in value. When other Brokers e.g. ICICI and Aditya Birla are providing this facility, why Zerodha is not able to do so? After all funds remain with Zerodha for any margin requirements..
Preeti, the stocks are pledged with the clearing corporation, so selling without unpledging wouldn’t be possible, or right. We’re working on the instant unpledge process to allow you to sell pledged stocks.
Since 2016, you are giving the same answer that zerodha trying for instant selling of pledged shares.
Many retail zerodha customers are at disadvantage due to this. So I have lost all faith. Now no option to move to other brokers
Sir,
I could not change and do unpledge and repledge my Liquid Bees.What shold I do now.I have enough funds in account.What should i do now.Please guide
As per new Margin Pledge System, if I pledge some of my share, can I get the Margin which can be utilised for delivery based trading?
Actually I am not understanding what is pledge unpledge. pls explain it properly I have holding many shear’s so is it any issue ??
can we use pledging amount for trade in long cash segment
Hi, Can I buy shares on delivery base, using available pledged shares’ margin? if yes, in how many days do I need to settle the ledger in cash?
Do I need to maintain any upfront funds in my account to sell any my holdings ? Also can i use the funds on the same day to buy some other stocks after selling my positional holdings ?
Since 3 days my pledged shares worth 10lacs have vanished from console and I haven’t received any repledging request from Zerodha for those. Can you please let me know what has happened to my shares.
That’s because after 1st September all previous pledge will be revoked
What’s the reason behind keeping 20% of the scrip value before selling the scrip.
Going forward, since the stocks are all held in the client’s own account, any approved security will be accepted for pledge.
So do you accept FD as collateral or not?. Keenly waiting for reply.
Once the pledge is approved, margins will be provided against the pledged stock from T+1. Once the full fledged APIs are available, we’ll work at providing near real-time margins against pledge. For this my suggestion is that
SEBI can introduce options like.,instruct all the clients to pledge it on the weekend. So that clients can utilize margin from monday onwards instead of T+1.
To some extent I have understood the process, but there are rounds in the market that even to sell the share in our dp we have to maintain the margin there is some confusion. And where we have sufficient funds with the brockers
In the new system, Zerodha has a great disadvantage. It does not permit pledged securities on real time basis, where as Brokers allow it. At Zerodha, it takes more than 2 days, as you have to first unpledge them, for which they take minimum 2 days. This should be brought to the Notice of SEBI.
i just wanted to confirm that we will not be able to get intraday margin like 10x on cash stocks, as we were getting by today ?
I have the same issue, and the ONGC stocks are rising now, without me getting any option to get it UNPLEDGED. Please help quickly. This time, I am seeing, more delay than usual from your side. Any major issue?
As I pledged my shares, my shares have vanished from my holdings.
Just got a mail that your pledge is successful.
a) Where have my shares gone?
b) What will be the procedure to unpledge them back?
No it wont impact you, its only for traders who pledge their equity holding and use the margin to trade in F&O.
I have a simple question.
I have invested 1 Lakh total in 3 scripts and I only buy-sell in cash i.e. I use only what I have and don’t use extra margin.
Will the new margin pledge rule effect me?
Hi, Holdings and pledge had gone negative. This is poor execution by Zerodha. They had setup automated calls etc to inform us about new pledge system. But havent given a clue that some pledge will be amiss for a while. With so many newcomers/retailers, they should advise us of this rude shock which we may receive during re-pledge process. Should have included this in Risk-Assessment to avoid customer panic.
BTW, you can check holdings in CDSL Website by logging in using BO-ID and PAN.
Same here. suddenly my entire holding + pledge has come down drastically. pledge shares are not appearing. dont know whats happening.
Hello I just confirmed my pledge on CDSL website, however the pledged shares have disappeared from my holding (console). Values of pledged shares have been reduced from my total investment. where have the pledged shares gone? Have received a message and an email from CDSL that my pledged request is successful. totally cluless what is happening and whats happened to my pledged shares. Pls reply
Hi,
With the new pledge system, will I be able to see all my holdings in Kite (like in Console->Holdings)? Currently the pledged shares are visible only in Console and Kite shows only free hold shares.
It will be good to see consolidated view of my holdings in Kite as well may be with a marker P: x (of Y) like (T1: 50) 100.
Thanks for ZERODHA Team. I pledged all my holding in New Pledge System and confirmation mail received from CDSL.
Till date ie before 31 Aug 2020, CDSL is charging just Rs 12 for pledging and un pledging particular scrip then why Zerodha is charging Rs 70 including GST from its customer.
Really fail to understand when other brokers are charging zero fee for pledging and un pledging then why zerodha is charging money for the same and on the top of it is five times more then what CDSL is charging. Kindly advise reason for this discrepancy..
Also, per latest notification, CDSL has further reduced pledging and un pledging charges to Rs 5 per script then why zerodha is not reducing the same and suggesting its customer it will continue to remain the same post 31st Aug 2020 . Kindly advise reason for this discrepancy as well.
In motilal oswal I could pledge all securities without any issue as they intimated well in advance , but in zerodha they are intimating at the last moment. As millions of customers are trying to pledge, there is heavy traffic to CDSL website n the site is crashing.
Zerodha should have done this last weekend itself as they knew this issue would happen. Now if we can’t pledge shares due to last minute changes, zerodha will either liquidate our positions or charge penalty for non of our fault. I think we should reach out to consumer forum incase there is any loss due to liquidation. I don’t understand what zerodha was doing for last 2 months.
OTP not generated….error on page…. Please HELP!!!
In the new system, I want to change the quantity (from earlier) of stocks to be pledged. How this can be done? I am getting the quantity which was pledged earlier.
unable to generate OTP..system error.
CDSL margin authentication not working. The page is showing error after putting OTP. Kindly check into it team Zerodha. this 8 pm deadline is like ticking bomb for some trader.
CDSL page not working , not getting OTP and received mail from zerodha it should be done before 8 PM today.
CDSL website is unable to generate OTP. Been trying for so long. What to do now?
I am new here. My old brokerage firm allow me to do intraday and take delivery with the value of shares I hold in my demat account. I had to transfer money only in T+2 days. As that is not possible here I may have to pledge shares to do intraday. If cash balance in my account is 0 then can I do intraday with margin money I get by pledging shares? Will I have to pay interests if my account balance become -ve due to intraday loss even if I transfer money in T+2 days?
Hey Matti ,
Good to hear about New pledge System going live.
Had a query – What about Old Securities which are already pledged ? Do we need to manually Unpledge or it will be done automatically from your end ?
Hi,
How to make sure that the Pledgee BO ID as displayed on the CDSL pledge OTP webpage is of Zerodha only.
1) We dont know Zerodha’s BO ID.
2) There is no mention of Zerodha’s name on the CDSL webpage.
3) This becomes more confusing if someone is pledging to multiple brokers.
Basically how to be sure that the Pledgee BO ID and the Broker match.
Hello Matti,
Thanks for the update on the new pledge system going live.
Is this process automated now? I am curious if the scrips are pledged on Holidays (Saturday and Sunday), would we receive mail from CDSL same day? If authorized by the client with the OTP same day, would the margin be available on Monday morning?
All my pledges were abruptly revoked yesterday. My account is now showing a HUGE NEGATIVE BALANCE.
The new CDSL OTP system is not working when I made a new pledge. This in UNACCCEPTABLE.
Call me URGENTLY to FIX THIS.- you can get my contact details by mapping my email id.
Did anyone use new system
Hey Vikas, all fresh pledge requests are now being routed through the new system.
i deal in futures more than cash , what is this pledging i am not understanding, I do BTST, Intraday and positional in futures , will this system affect my operation , can u give one example by taking a script
Rajani, this doesn’t affect you. Pledging is just using shares as collateral to get additional margins. Read more here.
Lets say i have pledged 100 share of xyz company and I want to pledge again 200 shares. Will there be pledging charges levied for increasing the quantity of stocks of same company ?
Yes, every pledge request is charged separately.
As per CDSL, news published on 24th August that margin pledged and unpledge charges has be reduced to 5 from 12, can you please confirm if there will be addition charges from broker side also for the same
Hi
I am unable to figure out as I am not getting reply from support when the new pledging method will go live so there is least inconvinience caused
Hey Chinmay, the new pledging system is now live. All new pledge requests are being routed through the new system since yesterday.
Just got response from support team. ” New pledge system is not live yet. Zerodha is waiting for 1st September and working… Email notification will be sent.”
Hey Krishna, we have taken the new pledge system live. All pledge requests are now being routed through the new system.
Hi Team,
could you please tell me is it possible to get collateral margin from Mr. X who has pledged in his demat and he is going to lend me that Margin and that margin will be used only Mr Y instead of Mr. X, please clarify.
Thanks,
Chikka
You have to buy it from Kite APP. EBBETF0423
Not able to pledge EDELWEISS BHARAT BOND FOF – APRIL 2023 units purchased through Coin app. I bought this only for the purpose of pledging as it was listed in the securities available for pledging by zerodha. Please help why pledging option is not showing up.
Hi, When this “new” system will be available. can this be notified to all clients who have already pledged their holdings? Note that this is really becoming over hang and unable to take effective position due to un-certainties
Zerodha,
What has happened to you? You were always so quick (earlier) in responding to updates to new procedures/processes!
I am tracking this page on daily basis.. why there is no update coming here?
All other brokers have already intimated their users with respective pledging steps!
I am utilizing margin through pledged Liquid mutual fund units, Please tell me will there be any interruption in my trading due to new system?
I have already undergoing positions in F&O segment.
Any updates on this when it will be going live. Only one week more for the last date
How will Liquidbees be treated in the new system.After selling them will we have to wait for T+2 days for trading against them?
While Sharekhan has already mentioned pledge/unpledge process, are you guys aware if MF pledging in Sharekhan is also enabled online now?
I want to understand in simple terms. What if I don’t want to pledge my shares and want to buy shares only when I have money in my trading account, what do I have to do?
Suppose i hold few shares in my demat under some other do participant (read shares bought through another broker) can I pledge those shares to gain margin on zerodha
Sharekhan already provided the date for re-pledging will start from Monday 24th August. When will Zerodha tell us?
Has the new margin system come live..? My holdings has been unpledged by Zerodha. I am waiting to repledge it if the new one has been implemented.
Hi,
I had unpledged and re-pledged my securities in 1st week of August after getting notification from your side about new pledging framework.
Zerodha has also deducted the pledging fees again in August and this has also resulted me loss of trading opportunities for whole 1 week.
And now you are telling us to again repeat this process? Why should we do it?
As suggested by you, we have already done this process.. this has resulted me loss of good amount of money in 1st week of August.
Who will compensate for it? Isn’t it extremely unethical from Zerodha’s part?
New margin pledge system is live? Please work on that and make it live asap such that we can gradually move our holding from old system to new system without impacting F&O positions.
I have unpledged and repledged the share to check the new system but the new system is still not live. Now again when the system will become live we have to do this process again which again charge some amount. Can we get the notification once the system is live.
Hello, Please update when the new system will go live. If it is going to take few weeks I will pledge using the current system.
Matti had gone underground in search of answers to our questions????
Zerodha…. Please provide some answers to our questions above… Time is the essence here…
Hi Matti,
Last week On Monday my shares were unpledged. Till date no announcement on new system being live.
Now if I need margin I’ll have to pledge the shares in the old system and you’ll un-pledge them whenever you’ll feel like.
And again you’ll give no assurance on when new system will be live.
In all this unprofessional behavior you’ll not forget to take pledging/un-pledging charges.
On top I’ll miss some trade opportunities as well, due to lack of margin.
I second Dheeraj. It would be great if Zerodha can look into Waiving/Reducing pledging charges while migrating from the old pledge framework to the new pledging framework, also make the process of doing it with least friction (many traders are utilizing the existing pledge to hold overnight positions)
Would await Zerodha folks to comment!
I don’t think Brokerage firms will voluntarily bring to the notice of SEBI, because new mechanism (repledging) is an opportunity for the Brokerage firms to get additional revenue/income. It is beneficial for them.
Yeah…but if SEBI hasn’t thought in that direction, broker should bring it into their notice since non-discount brokers such as Sharekhan anyways don’t charge for pledge/unpledge!
Dheeraj, I echo your views. I had the same thoughts. The instruction to the CDSL/NSDL and Brokerage firms to waive off the pledging charges or reduce the pledging charges to a bare minimum for existing pledged securities should have come from the SEBI when it announced mechanism for the new process. At least, this should have been implemented for the month of August. Unfortunately, SEBI ignored or lacked thinking in that direction.
Hi Team,
I have 52 securities pledged at the moment…are you saying that I will have to again pay 52 * 75 = 3900/- once the new system goes-live?
I think, for an existing pledged security, it should have been dealt in a more professional way to save retail investors by either:
* Negotiating with CDSL to not charge anything
OR
* Broker (Zerodha) should borne half of the new pledge fees
Hope I am making some point!
Kindly consider!
Thanks,
Dheeraj
Hi,
I bought a stock today on delivery by paying full cash. If I intend to sell it tomorrow, should I pay an upfront margin.?
Please guide me in this regard..
Hi,
I bought a stock today on delivery by paying full cash. If I intend to sell it tomorrow, should I pay and upfront margin.?
Please guide me in this regard..
Any specific date you have in mind to go live with new pledging system next week?
How many shares i can buy in banknifty if open some strikes open interest only 1000 shares in strike can i take position 800 shares.?
There is any rule for position limits?
Vikas, there are no restrictions on strike wise OI. You can hold 100% of the OI for that strike too.
Positions limit apply at 5% of the total OI for an underlying(All Banknifty F&O OI).
Please let us know the date when the new system will go live. We will plan accordingly. It will be difficult to unpledge and pledge if we have any positions.
Dear Team ,
I want to pledge some securities to start trading just wanted to have a idea if the new system is going live by end of this week so that i can wait or if it is gonna take time till end of month then probably ill Pledge under old system now.
The new pledging system should be live by the next week, Vatsal.
Hi,
I have been pledging my holdings in the past. Today i.e. August 11 i was trying to pledge my Yes Bank shares purchased in FPO, but i can’t see the option of pledging the same against YES Bank shares. Is it because of the new rule or it is not allowed in Yes Bank only.
Hey Saurav, the new pledge system isn’t yet live. We’ll notify you once we have it in place. Currently, we are not taking pledge requests for YESBANK. We’ll look at allowing it in the new pledge system.
Today my pledged shares were automatically unpledged and I can see them in holdings, so I believe new system is live.
If I pledge them now, that will be in the new system?
Your shares were unpledged since there were no open positions. The new pledging system will go live next week.
Apart from the pledging process will the list of funds currently considered as 50% cash equivalent also change as per new process.
Kindly comment on above query please
No, that remains the same.
Hi, as per new SEBI margin rules, how much margins will be required to sell banknifty futures intraday now? how much money i need to keep in my account to short 1lot of banknifty futures in intraday now?
Will liquidBees and few other liquid mutual funds still considered as 50% cash equivalent now while pledging?
Thanks for the detailed article.
Can i leave the pledge for longer duration? Say i have liquid funds used as collateral for 50% and remaining 50% through cash. Will there by any interest for longer duration pledges? or is it mandatory to frequently unpledge post the trade?
There won’t be any interest as long as there’s no shortfall in the cash component. Also, it isn’t mandatory to unpledge.
When will this feature be live?
We should be live with this by next week. We are working closely with CDSL on integrating the new system.
I have pledged some mutual fund on august 6 unit and it got debited from my account. Why the new system was not followed?
We should be live with this by next week. SEBI has permitted the implementation of the new system by 01st September 2020.
In the new system, how the margins required for a naked and covered (on stocks) call going to be different?
this question is for nifty option writing.
i am having equity delivery holding of 50 Lac against which i am getting margin of say 40 Lac.
I am using this margin for Nifty option writing for carry forward position without having any cash balance in my account. generally i sell today and square-off next day and again take new position of Nifty option writing by end of day.
How new SEBI rule will affect me ?
(1)Please guide us..When we can expect the new margin system to go live on zerodha( tentative date at least)
Actually from 31st July,many of us have not taken any positions just because of new margin System.
(2) After receiving POA,in how many days It will be effective in our account and how do we know,POA is effective.
(Since in CDSL Tpin,2lakh per script capping is there, I dont wish to spent Rs 60 every time)
When it will be Online…Do reply…i am not able to take positions
@Admin – Do we need to repledge Liquid funds as well ? Or this rule is applicable for stocks only?
@all – This post is *not updated*.
Feature is not live yet. Still it is using old method only and stocks are getting debited from Demat account.
Please refrain from unpledging and re-pledging to avoid additional charges.
I request Nithin to post regular updates on the status of implementation of the new system at Zerodha on Zerodha’s Twitter account to avoid inconvenience and additional charges for the clients.
Is new system in place and working?
Not yet. SEBI has allowed the implementation of the new system by 01st September. We’re working with CDSL to take it live as soon as possible.
I have placed a pledge request today. Would this request be cancelled or will the pledging occur in the previous method today?
If that is not the case then the page should have been updated earlier soon after. What about people who have unpledged by seeing your notification . I personally have unpledged more than 15 pledged scripts. If I have to pledge now and repledge when new margin pledge rule comes in. Who will bear all this charges ?
Exactly…Even i did the Same…I have not taken any position from 31st July and Unpledged all my liquid fund to pledge again!!
@Zerodha… Do tell us will the repledge will be in new pledge system or not?
@Ayush I would suggest you to pledge it again. As per zerodha customer care it would take another one week for them to implement it. I have wasted my week trading gain due to this along with unnecessary pledging charges. Pathetic service guys @zerodha. We atleast expect you guys to update the post so that others won’t do the same mistake like us.
Exactly
Hi,
I have unpledged all my shares on Friday 31, July, 2020 and raised new request for pledging today Sunday 2nd, Aug, 2020. However i have not received any link from NSDL for OTP validation.
Is new system not effective, pls reply.
Is the new pledge system live ?
Can we start unpledging old securities and re pledging them ?
I have buy shares in delivery option Friday 31st July 2020 , I want to sell tomorrow is it allowed?
Yes.
does intraday mis product in futures will not be allowed?
This has nothing to do with intraday products but talks about the mechanism for pledging shares. Nothing changes for you.
Hi Team,
If i transferred 50k in my account , i get margin immediately. if i buy something in CASH of that amount and sell on T1.
Currently i am able to do that , will there be any change in that ? or i need to wait to get stocks in my CDSL account ?
Regards
Nothing changes.
Hi, is the new system enabled now?
I jus tried but didn’t receive the mail or OTP to approve the pledge as mentioned in instructions above.
Will liquidBees and few other liquid mutual funds still considered as 50% cash equivalent now while pledging
Can we continue to use Margins from old framework of Equity pledge till End of August (31st Aug 2020) ?
The fee for pledging will continue to remain the same. – Please clarify on this. Saw a news that above 1 lakh it is more charge like 0.5%. Does that mean if I pledge 1CR I have to pay 50K ??
Interest is only for over night holding or interest is charged for intra day trading as well ?
How long I can use the margin ? and How interest will be calculate or reduce. Is that interest reduce daily basic ?
Is intraday leverage will be affected for banknifty option selling
From 1 august 2020 or later
Hi Sir,
Can you please be kind enough to explain the intraday transactions in ZERODHA post 1st Aug 2020, with steps it will be useful. Also please let us know how much margin do I need to keep and where etc ????
Sir, In new system, shares pledged and margin limit created. May I use this margin to buy NIFTY PUT or NIFTY CALL ?
Please clear my doubt
dividend received for pledged shares has not been credited to my trading account as per your norms
after how many days will zerodha transfer these amounts from broker account to clients account
ref
clienrt id DA6517
hdfcamc 150 shares pledged
div amount 28×150=4200 not credited
kindly clarify
pledging charges are one time or we have to pay every month and its 60+gst or there is any other charges?
Sir I want to know that if i have holdings in my demat account, so to sell those holdings do i need to provide the upfront margin in advance from now onwards, as i am holding bajaj finance from last 10 years so its value is big and it’s upfront margin is huge amount.
Why is there a limit of RS 2 lacs per scrip imposed at Zerodha? Will this go away as a part of this change?
If I have open overnight positions (options sold) using my pledged margins in liquid funds, will I have to compulsorily square off my trades during the re-pledging process? What can be done so that there is no loss of business
Sir,
(a) I have pledge of Bharat Bond and Axis Liquid Fund with CDSL OTP in July-2020. Does it still need to unpledge & pledge to fall in new system
(b) In new system also, restriction of Rs 2 lac per scrip and Rs 10 Lac/day will remain ?
A) Yes.
B) No.
Thanks.
Hi,
I tried to pledge a scrip of more than 3 lac.
I get an error “Failed to pledge/unpledge: You cannot pledge more than Rs.200000 for the same instrument. You are exceeding it by Rs.100959.4912”.
Also, if I pledge less than 2 lac, I didnt receive a mail from CDSL to confirm the pledge. Is the new system active?
Hey, currently, there’s a limit of 2L per scrip and 10L overall per day when you are pledging from your account without a POA. The new pledge system isn’t live yet. SEBI has allowed implementing these changes by 01st September. We are working with CDSL to make it live as soon as possible. You will receive communication once the new system is live.
Could you please advise on
1. Options call and put buying inrelation margin amount require to buy premium amount.
2. Should margin amt require at the time of exit option which is bought earlier.
This has nothing to do with margins for positions but talks about the mechanism to pledge stocks for margins.
Dear Sir
I wish to know if I have sufficient cash balance in my Account still I am required to Pledge my holdings. Kindly clear
Regards
No.
This may be a good implemets.
But i think trade volume will be reduced or it will take more time to increase trades once the limit is over.
I do not want to pledge any share but will maintain sufficient fund balance instead. Will this be possible?
User code QX9250
When POA is given why separate pledge? Brokers can give margin after allowing haircut
Is it have anything to do with CNC orders?
I’ve purchased shares of a company on BSE for long time holding. What will I have to do while selling it?
Please guide.
CL BR5462 When Bracket order will be enable?
What are the pledge charges ?
If I will pledge my liquid funds.
The cost of pledge is high it should get reduced once APIs are developed.
Moreover the the facility of selling pledged security should be given so that the client can use that money to fund delivery obligations arising from some f&o position
Hi,
1. In the extremely unlikely scenario of a broker default, will my pledged shares remain safe as long my balances are clear ?
2. Can we also have the link of Sebi circular(s) to this effect ?
For existing open position against collaterals of existing stocks, how the margin requirement will be monitored during switching over process of custody of stocks from broker’s account to client’s demat account. It may not be possible for clients to arrange for full margin for open positions in the transition.
When will pledge against Equity Mutual funds will be reality ? ETF are good instruments, but the spread between NAV and the trading price makes it less effective.
Are you going to allow Sovereign Gold Bonds as Collateral?
If not kindly allow SGB as collateral. It’s long pending request.
NRIs can get MARGIN in doing pledge?
Thanks for the update. Please allow to pledge MF also with haircut. 50% Cash 50% security should be good.
Hi Venu,
Thank you for the nice explanation. I wanted to understand the impact of this change on “Good till trigger” orders.
Can you please explain thsi.
Will the haircut remain the same for liquid bees?
Is this anyway connected to Collateral Hair Cut Percentage deduction benefits Or it will remain same
Sir,
What is the minimum qty to pledge?
Is to possible to use the pledged margin to buy a stock for delivery?.
Thanks in advance
I am planning to invest in a liquid fund and Gold ETF and provide this investment as collateral. Shall I wait till 1st August?
You can invest at any time. While you can pledge now too, the pledge will be reversed by Aug 31st if you do it before Aug 1st.
Sadly we haven’t seen any goods steps taken by SEBI when LEEL , ILFS, etc failed.
All new pledges will have to be created through the new pledge system effective August 01, 2020. Brokers have been given time until the 31st of August to return all securities pledged using the existing framework and route them through the new pledge system.
Does the above statement mean that – we can manually un-pledge old framework and shift to new framework step by step all through August (30 day window) ?
The reason i am asking is – i have Dec 2020 Options selling Positions which are using the Equity pledge Margins … It would be nice if i dont lose the “Margins Fully” from Equity Pledge while the pledge is transferred from the old framework to the new one … If i have the 30 day window in August to shift in phases (20% of my portfolio each day) – that would be nice
You can either do it manually or we will do the unpledging for you. We will plan it in a way that has least friction for you.
Awesome ! Thanks for the quick Revert …
Hi – can the unpledging and re-pledging be done through the course of August?
Yes. The old and new systems will run parallelly throughout August.
sir what about old clients we also want tpin security for selling shares.when it will start for old customers.
Working on this.
Regarding ” All new pledges will have to be created through the new pledge system effective August 01, 2020.”
The new pledge system starts in Console also from 01 August 2020 ?
Yes.
Hi,
So neither has the process been updated nor the holdings stay in my demat,
holdings still get debited from demat upon pledging.
no otp based system in console yet
Can you please confirm?
I rather find strange that you are suggesting that current stocks which are pledged needs to be unpledged and repledged .
The new system entails that security would now reside in clients dmat account, so you can transfer it from your pledged pool and immediately shift it TMCM account of the client . All the new pledge action can after the cutoff date can follow the new procedure.
By adopting unpledging and repledging process lacs of Rs would be moped from investor as they would be required pay pledging charges two times.
This certainly would make investors poorer by this amount.
No Pradeep, that’s not possible since the new pledge requires you to approve the request by an OTP sent to your registered contact details as explained in the post above.
Will POA still be required ?
PoA is optional even now. Check out this post.
So POA will be optional for pledging shares for margin?
Please expand your pledge list and include corporate bond and other debt funds and also all equity funds available on coin.
Once this new system is live, all securities in the approved list of securities will be allowed.
Is there any changes regarding repledging on quarterly basis
No.
Currently, Zerodha doesn’t allow pledging of SGB’s. With the new change will I be able to pledge my SGB’s as well?
No, SGBs aren’t on the approved list of securities for pledging.
As per NSE, they are allowed for pledging. But not in the Zerodha list of approved securities. Had a support ticket raised regarding this as well. What am I missing?
Absolutely, Matti please answer this. There indeed are so many SGBs (different tranches) at NSE list of approved securities.
That’s because it’s not liquid…if u could provide margin losses then broker can’t sell it buying n selling is very less
As of now 8th Oct 2021, Zerodha is allowing pledging SGBs. Now the question is, Is Zerodha considering it as liquid fund or not ? If this is a liquid fund, then 50% cash rule will not apply while selling options.
What all securities are currently available to be pledged which Zerodha is not providing due to operational overhead as mentioned in the post?
Can i find the list someplace?
80 % of my money is invested & pledged with Liquid/Overnight funds.
a) So till 31st July, I can continue taking overnight positions with the pledged money as well, right?
b) For people who are already invested & pledged somewhere, the time is till 31st August to switch to the new system?
b) Till around when can we expect some clarity on unpledging and then pledging again? One day before & on expiry day, full margin is needed, so hopefully some time will be given to switch over.
Thanks.
a) Yes.
b) & c) Yes, we will email you first and then unpledge your existing pledges. You can re-pledge immediately.
To unpledge, I will have to close all my positions and unpledge . If I close my positions today, can I unpledge today itself or wait for a day ?
To open positions again, I will have to wait for day as margin will be available only after that. Am I right ?
if we re-pledge, will you give margin immediately, or will take a day to give. what will happen to positions with out margin ? do we need to pay short fall margin penalty ? I have 2cr margin. that means I have to pay 2L per day penalty till I get margin ?
You will need to have margins for your positions. Positions may be squared-off or attract penalties if not. Since this is a regulatory change, we are required to unpledge and you would need to re-pledge. However, we’ll do this activity over a weekend so you can re-pledge easily. Margins from re-pledge will be available from T+1.
So to be specific,
I will have to close all my positions that need margin from Pledged Shares/MF on 31st Evening . You will unpledge over weekend. On Monday(3rd August) I will have to re-pledge. I will receive margin on Tuesday. then I can enter positions. Is this correct. ( I will be out of business from Friday night to Tuesday)
Can we distribute this process through out Auguest ?
Will it effect the intraday leverages provided by zerodha??
This has nothing to do with intraday leverages.
Will it affect the current margin level, like 6% for CO for HUL? Will it get reduced?
This has nothing to do with intraday margins.
Once the stock unpledge during the day, will i be able to sell the stocks on the same day or next day ?
Not right away, but we’re working on making this possible.
How many days it will take you guys to make that option for selling the stocks without unpledge..as unpledge require 1 day time and clinet has to bear losses when expiry is near by…this is worst in zerodha..so closing the account for that reason only..from last 6 months you guys didn’t do anything on this one..and as per internal news you guys are going to implement it as you guys want to use client stocks to to give margin to your some special client…worst ever scam by zerodha…
Jigar, the new pledge system very clearly keeps the stocks in your own demat account, so the pledge margin is only available to you. Using your pledged stocks to offer margins to other customers is not allowed, not something that Zerodha does, and is simply a conspiracy theory.
Hi Matti,
I have been struggling with the same issue for the last couple of expiries. I wish to sell some of my pledged holdings and utilize the funds for buying other shares but not able to do so.
Especially during expiry, when I opt for physical settlement of a few of the ITM positions, it becomes difficult to get fresh funds every time.
I have been raising tickets and calling the support team, but absolutely no result.
I have great concern for such kind of impediment from Zerodha .
Do pl start same day instant activation of unpledge request.
This is on our to-so list, Arun.
Hi, what’s the update here?
Hey Karti, we’re working on instant unpledging. We’ll keep you posted.
It has been one year you are working on this ?? It is critical or we have to close account. We should be able to sell the pledged shares by instant unpledging. Since delivery is T+2, it is perfectly logical and provided by most brokers !
How can i sell my holdings without unpledging the stocks. Because i fixed a target value. For the time duration of unpledging process. stock went down… Example : Recent time last week. Wipro stock i bought around 435 rs. And i planned to sell @ 510 rs. In the volatility next day stock comes below 500. This process is very difficult for us. Apart from this i am very happy using zerodha trading account. Kindly take some action on pledged stocks to sell directly without unpleding process. As soon as possible.
When shall we get the facility to sell pledged stocks, allowing to sell pledged stocks without having to request for unpledge and wait until they are received in my demat account ?
Hi Jigar, I would like to know if we can sell pledged shares directly w/t unpledging them on other broker’s terminal. If yes, then I will also think of leaving zerodha
All brokers which are not low cost brokers, allow selling shares even when those are pledged eg MOSL and others .
It’s same across all broker’s as for now expect few……a broker can’t use client money for other’s because the share will not leave your account. I don’t from where will u gte this information.
When you pledge,ur shares will sit in ur account only and they use there internal funds to or there own money to give you money. U can’t pledge it to banks or nbfc to get money,they they use there own money and shares don’t leave ur account what’s the use of giving money to others….u should exit stock market of u can’t understand the rules. When u unpledge u need to unpledge in clearing corporation,then broker. As new trader I can pretty understand the rules
Is there interest will be on holidays ??
If i want to sell options how much cash required in account (1 lot banknifty at 250)
Yes, we are waiting for the facility to allow us to sell pledged share directly without waiting for unpledge. Sometimes we have F/o position against pledge, which we don’t want to square-off but want to sell pledged stocks at the same time.
If u but FO using margin money to should either pay in for the position as at present u used margin money. Without paying margin money u can’t sell margin pledge shares
For existing pledged shares, are you going to charge un-pledging and pledging charges again?
what if client used SLB for pledged shares? will that be allowed?
Yes, as mentioned in the post above, there will be a charge since the depository charges it. Could you give more details on what you’re asking about SLB?
What about already pledged charges amount for per script 60rs.. will zerodha credit it ?…we don’t want to unpledge and pledge😑
Since the shares won’t be debited from DMAT, one might go ahead and lend them
No, when you pledge, a lein is marked against them. You can’t pledge to get margins and then lend the same shares to someone else.
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I HAVE AN ACCOUNT K K GUPTA HUF I CAN SELL PLEDGED STOCKS WITHOUT GOING TO THE PROCESS OF DEPLEDGING THIS IS DONE BY THE BROKER HIMSELF BROKER IS TRADEBULL SECURITIES PVT LIMITED MOREOVER 100 PERCENT PLEDGED STOCKS AFTER MARGIN IS ALLOWED AND NO CASH REQUIREMENT TO DEAL IN f & O