The National Stock Exchange (NSE) has significantly changed the intraday and derivative trading margin funding collateral list. Out of the 1730 securities present in this list, 1010 have been excluded. This decision of NSE is going to be implemented from August 1. These include big companies like Adani Power, YES Bank, Suzlon, Bharat Dynamics and Paytm.
NSE Issued A Circular
In a recent circular, the National Stock Exchange informed that the list of securities used as collateral for margin funding in intraday and derivative trading is being tightened. The exchange said that it will accept as collateral only those securities that have been traded on at least 99 per cent of the days in the last 6 months and have an impact cost of up to 0.1 per cent for an order value of Rs 1 lakh.
MTF Is A Facility Like Buy Now, Pay Later
Margin Trading Facility (MTF) can be compared to ‘buy now, pay later’. MTF allows investors to buy shares for a part of the total trade value. Investors invest a small amount, and the rest of the money is given to them on interest from the broker. For example, if an investor wants to buy 1,000 shares of a company trading at Rs 100 per share, he will need Rs 1 lakh. With the help of MTF, he will pay only Rs 30,000, and the remaining Rs 70,000 will be given to him by the broker.
Stocks Of These Companies Cannot Be Pledged.
In return, you must pledge your account’s stock or other securities. These are considered collateral. As per the new circular, the stocks of the 1010 companies removed from the list will not be accepted as collateral. Companies like Bharti Hexacom, IRB Infra, NBCC, Go Digit, Tata Investment, Inox Wind, Jupiter Wagon, Jyoti CNC, JBM Auto, Hatsun Agro and Tejas Network have been excluded from this list. They will be removed from the collateral list in several phases.
