Who can avail shares as collateral facility?
All the Reliance Money Trading customers can avail this facility.
What will be the charges for using shares as collateral/how will client be charged for any ledger debits resulting from trading activities?
There are 2 types of charges that may be applied to clients using shares as collateral
A. Pledge depledge charge
There is a charge of Rs/- 25 per scrip every time you pledge or depledge for all clients.
B. Charge on ledger debit in any of the following ledgers in your trading account.
- MTM
- NSE
- BSE
- FO Margin
The charge schedule for Limit Card and % brokerage clients for use of the shares as collateral facility and the resultant debit occurring in ledger which is not immediately settled by online transfer of funds is as follows.
| Charge Structure | Ledger Debit Charges |
| Limit Card | 21% per Annum |
| % Brokerage | 18% per Annum* |
*Calculated daily and posted in Charges Ledger to prevent compounding effect.
Ledger debit charges will be posted once every month.
Example: 1
Charge Structure: Limit Card
Ledger Debit Charges
F&O; Margin Ledger = -5000
F&O; MTM ledger= - 5000
Total Debit = -10,000
Ledger Debit Charges for 1 day = (10,000 x 21% ) / 365 = 5.75
Example: 2
Charge Structure: % Brokerage
Ledger Debit Charges
F&O; Margin Ledger = -5000
F&O; MTM ledger= - 5000
Total Debit = -10,000
Ledger Debit Charges for 1 day = (10,000 x 18%) / 365 = 4.93
From where and how can a client pledge his shares?
Pledging facility is available on Insta Trade, Fast Trade and Easy Trade. On the Trading Portals (Insta and Fast trade) go to the “Pledge” tab available under the Reports menu and “Demat Balance” tab on Easy Trade. Once the page is opened, Click on terms and conditions of Shares as Collateral, read it thoroughly and accept to start the pledging process. Accepting terms and conditions is mandatory to avail this service. Clients can make pledge request on-line or sign an off-line form (format available with branches and Sub brokers) and get it processed through our branch network. Handling charge for off-line request will be as per charge schedule. Pledge / Unpledge request can be placed during market hours only.
Post acceptance of the terms and conditions, the shares which are accepted for pledging will have a Pledge link activated. Click on pledge and you will get a pop-up showing the stock and quantity to be pledged along with their valuation. Change the quantity if only part quantity to be pledged and then click on submit. The pledge summary will be shown on the same window. If the pledge request is rejected, then the rejection reason will also be seen on the same window.
Are all stocks allowed for pledging?
All stocks are not available for pledge. The company (Reliance Securities Limited) will decided from time to time the list of stocks that will be available for pledge. Upon attempting to pledge stocks which are not available for pledging, system will give a failure message. To find out which all scrips are available for pledging, one can refer to the Pledge Basket report available on trading portal.
Where can the margin provided against the pledged shares be viewed?
Margin provided on pledged shares will be reflected in the Ledger Balance report under the Reports menu available on the Trading portals. This limit will be shown against the “Limits given against collateral shares” row.
How the eligible margin amount against pledged shares is calculated?
Limit against stocks will be provided after applying a hair cut %. The hair cut % for each stock will be decided by the company.
For example if 100 shares of Reliance Capital are pledged and previous days close price of Reliance Capital Rs.1000, then the limits provided will be as calculated as under:
- Market value of shares to be pledged = (price x quantity) Rs.1000 * 100 = Rs. 1,00,000
- Applicable hair cut for Reliance Capital scrip = 40%
- Margin available from the above pledged collateral = [100000-(40%*100000)]= Rs.60,000
- Trading limits available against the margin of 60,000/- is 5 times for cash margin trades and as per exchange norms for futures. (Same as would be applicable for cash margins.)
- This trading limit is made available in client’s trading ledger.
- Stocks will be valued at previous day’s close price. However the company shall have the discretion to change the basis to current day’s price.
- Hair Cut % is also subject to changes at the discretion of the company. The value of shares that were reduced due to Hair Cut % will not be available for meeting M2M losses/margin shortages/debits etc. Before squaring off a loss making position by the company due to margin shortage, the value of collateral after Hair cut only will be considered towards available margin.
Where can clients view their pledged shares?
Stocks that are pledged will be in a different row in the DP holding report and type of account will be shown as DPH. Unpledge option will also be available there.
In whose favor will the stocks be pledged?
Stocks will be pledged in favor of Reliance Securities Limited.
What is the process to unpledge the shares?
To unpledge your stocks, simply go to DP Holding page and click on unpledged link next to the stock you want to release. Stocks can be unpledged partially as well. Stocks can not be unpledged if client’s “derivatives limit”. However clients can sell stocks or transfer amounts to bring the limit in positive and subsequently unpledge the remaining quantity. Pledge / Unpledge request can be placed during market hours only.
Can shares be unpledged any time on the same day?
Clients can pledge and unpledge stocks on the same day. Clients may not be allowed to unpledge all shares in case they have ledger debit.
Is there a cap on the minimum or maximum amount of shares one can pledge?
Minimum value of pledge per Scrip (Per ISIN) is Rs.10000 after applicable haircut. However, the cap on Max/Min amount and quantity can keep changing according to the company’s risk policies.
Can pledged stocks be sold?
Clients can sell stocks even when they are pledged.
In what all segments will the benefit of pledged shares be given?
Limits provided against stocks can be used for Cash Intraday Trading, Futures trading and Options sell transactions.
Through which all trading platforms can the client avail this facility?
Pledging of stocks can be done through Insta Trade, Fast Trade, Easy Trade and Super Trade.
Will MTM and Loss made on any position be adjusted against the margin provided after pledging shares?
No, MTM Loss will not be adjusted against these limits. But MTM Loss will get reduced from balance available limits.
What happens if a client makes losses on the positions taken against the margin obtained by pledging shares?
Client’s positions may get squared off at the discretion of the company when the negative withdrawable balance is more than the exposure margin (in case of Futures and Option sell) and 50% of the margin blocked in case of cash intraday trading. If the limits are still in negative, then the shares under pledge may be sold by the company. The company reserves its right to sell the other shares of the client in case the shortfall is not met by liquidation, as mentioned above.
Are there any separate charges for availing this facility?
Each pledge and unpledged request will be charged @ Rs.25 (Excluding taxes and other charges) per ISIN per request. Apart from this there will be separate pledge set up charges charged by the client’s Depository Participant. Other than this we are not charging any extra fees for availing shares as collateral facility. However, in future extra charges will be levied to Limit Card clients for using this facility.
Clients shifting to Limit Card charge structure from Percentage brokerage charge structure will be charged Rs.200 + Service tax for every such shift.
Are there any other modes of activating the shares as collateral facility?
Clients can call up our call center to activate their shares as collateral facility and pledge their stocks if they have the security token for validation.
Alternatively the same can be done by approaching the nearest Reliance Money branch. Here the client will have to fill up the required forms, after which his request will be processed.
Who will get the benefit of the corporate actions like bonus, dividends, etc. while the stocks are pledged?
Clients will get the benefit.
Square off of Open Positions due to insufficient trading limits.
The square off of open F&O; positions and margin trading positions will continue to be done as it is done in the current system against cash margin. It may be noted that the value of shares that get reduced due to Hair Cut % will not be available for meeting M2M losses/margin shortages/debit balance etc.
Liquidation of stocks can occur because of two reasons
Debits incurred from Monday to Friday (Futures and Options loss debits and NSE / BSE debits and charges debits) in the client account should be paid by the client on T+1 day and in any case on or before the markets opens on the next Monday and if Monday happens to be a trading holiday, then before the next trading day. If the client fails to do so, stocks provided as collateral can be liquidated by the company at its discretion without notice, in order to recover the debits along with any other charges due.