We are pleased to announce an expansion of the current list of Government Securities eligible for pledging, starting from Wednesday, 17 May 2023. Dhan users will have the opportunity to obtain 90% of the collateral value as margin, which can be utilized as a Cash Equivalent margin. Kindly refer to the updated list provided below.
Thank you, one more request. Please do not remove any GSEC from list after publishing it unless exchange removes it which they do nearer its maturity.
Your customers would have pledged them . By first including in the list and then removing it you would make the GSECs purchased by your client useless for cash margin purpose. Retail customers mostly buy GSECs for getting cash margin.
For many GSECs exchange gives less than 10 % haircut, hence same haircut should be passed to customers . If that is not done then what happens to extra margin ? For example for 738GS2027 exchange only apply 5 % haircut , however Dhan imposes 10 % haircut. When this security is repledged to NSE-Clearing they will give margin equal to 95% of GSEC value. So the question is why DHAN should keep the 5% margin with them and do not pass to customer who’s security has been pledged & repledged.
@Beena The sole purpose of the NCL file (which gets updated around 20th of every month) is to notify the securities which are approved for re-pledging. However, for margin calculation and reporting, we use the EOD VaR file. Operationally the NCL file is just taken as a reference for minimum haircut that we apply. Just to cite an example, for liquid bees, we apply a haircut of 8% on the contrary to 10% which is as per the NCL file.
You are right w.r.t. liquidbees. Liquidbees is the poster boy of other brokers as well where they apply haircut slightly less than what exchange provides them. This is mostly compensated for brokers by surplus cash which customers have/leave with brokers at any given time.
This one script can not be used as an excuse to inflate the haircut approved by the exchange.
I am giving you the list of extra haircut applied by DHAN in case of 22 GSECs. You are applying extra haircut ranging from 5 to 8 % more than exchange.
Thanks for the reply.
Both STT & Stamp duty are not to be charged while buying GSecs. Only exchange transaction charges & GST on that can be charged as per regulations.
So, kindly ensure that stamp duty is also not applicable
@Beena Yes, we are aware of this. However, as I previously mentioned, we utilize the EOD VaR file for margin calculation and reporting. In fact, it is common for the majority, if not all, brokers to employ the same EOD VaR for this specific purpose. It should be noted that brokers may also implement additional haircuts based on their Risk Management policy. Nevertheless, we do not apply any additional haircut for the CASH component.
I am confused, you are applying 5 to 8 % extra haircut for GSECs then the haircut applied by NSE and this security is considered as cash component yet you are saying we are not applying any additional haircut for the cash component.
@Beena Its the NSE EOD VaR which is additional 5% to 8% over the NCL haircut. When I say brokers may also implement additional haircuts based on their Risk Management policy, it means over and above the haircut levied by NSE EOD VaR which we do not apply.
Looking at your list I bought IN0020070069 through IDBI and its available in my demat also. But when I am trying to pledge , your application shows that it’s no eligible . This does not give enough confidence if I go for enough buying in coming days. Please help