If you are an investor or trader in the stock market then you should know the SEBI’s Intraday Peak Margin Rules kicks in from 1st December, 2020.

Now let’s understand how it works and upfront margin is collected from client:

In this process, the exchange will collect the margin report from the cash and derivatives segment both at least 4 times in a day and the client has to pay the highest out of 4 or EOD. If there would be a shortfall in margin, then the client will have to pay a penalty as per norm.

The norm if peak margin will be implemented in phase manner from 1st December, 2020:

Phase 1: From 1st December, 2020 to 28th February, 2021, 25% of upfront margin should be available before the trade.

Phase 2: From 1st March, 2021 to 31st May, 2021, 50% of upfront margin should be available before trade.

Phase 3: From 1st June, 2021 to 31st August, 2021, 75% of upfront margin should be available before trade.

Phase 4: From 1st September, 2021, 100% of the upfront margin should be available before trade.

It is clear from the above that from 1st September, 2021, all the stock brokers have to stop providing the Intraday Leverage system. It means if you don’t have money in your margin account then you can’t trade. Or as they say, ‘Paisa Nahi to Sauda Nahi’.

Author:
Dr. Himanshu Barot, Professor, Unitedworld School of Business (UWSB)

Disclaimer: The opinions / views expressed in this article are solely of the author in his / her individual capacity. They do not purport to reflect the opinions and/or views of the College and/or University or its members.