Starting from April 1, 2023, the handling of unpaid securities belonging to clients will be conducted through a pledge mechanism in accordance with the SEBI circular dated November 11, 2022. Any securities for which the client has not yet made payment are considered as “unpaid securities”.
Under the new process, if you purchase securities but fail to make payment, resulting in a negative balance in your trading ledger, the unpaid securities will be transferred to your demat account upon receipt of payout from the exchange on the T+1 day (settlement day) unlike the previous payout of securities being in broker’s pool account. However, these securities will be automatically marked for pledge against the Client Unpaid Securities Pool Account (CUSPA). If payment is not made within T+1+5 (i.e. T+6) days, our risk management team will sell those unpaid securities in accordance with our RMS policy. The securities will then be automatically invoked to our CUSPA account to meet the exchange securities pay-in obligation.
The following changes will occur due to this new process:
1. Corporate Actions:
All corporate actions, such as splits, bonuses, and dividends, will occur directly in your demat account. This will provide greater transparency and eliminate operational inconveniences, such as fractional entitlement against splits and bonuses, dividend credit in your trading ledger, and accounting for TDS on dividends.
2. Pledge Charges:
As the shares will be transferred to your demat account and automatically pledged in favour of our CUSPA account, a pledge charge of Rs. 12.50 + GST will be applicable per transaction/ISIN.
3. Unplege Charges:
When securities are sold, they will first be unpledged before making actual early pay-in/pay-in to the exchange. Therefore, an un-pledge charge of Rs. 12.50 + GST will be applicable per transaction/ISIN.
4. Demat Transaction Charges:
To make early pay-in/pay-in to the exchange, a regular demat transaction charge of Rs. 12.50 + GST will be applicable per transaction/ISIN when securities are sold.
5. Invocation, RMS Square Off, and Stamp Duty Charges:
If payment is not made within T+6 days, our risk management team (RMS) will initiate a sale in accordance with our risk policy, and in such cases, an RMS square off charge of Rs. 20 per transaction/ISIN will be applicable. As the shares will be invoked, an invocation charge of Rs. 12.50 + GST will also be applicable per transaction/ISIN, and a stamp duty of 0.015% of the sale value will apply.
Thanks and Regards
– Shrimohan
Product Operations @ Dhan