Update On Funds Received From Delivery Sell Transactions3 min read
If you have sold a stock from your portfolio recently, you would know that as per SEBI’s Peak Margin norms, when you sell a stock from your demat holdings, you get only 80% of the total stock value in your funds balance on the same day and the remaining balance is made available to you on the next day. This is for your Demat holdings or stocks which have completed their T+2 settlement cycle.
But what about the stocks that haven’t completed their T+2 settlement cycle or are yet to be credited in your demat account? Such holdings which are more commonly referred to as T1 holdings have been enjoying the same 80% funds credit on delivery sell transactions as the demat holdings.
What’s New In Delivery Sell Transactions?
Effective 28th January 2022, selling shares bought in the last 2 days (T1 holdings) will get you only 60% of the total stock value in your funds on the same day. The remaining balance will be available the next day. Selling demat holdings will continue to get you 80% of the total stock value on the trade date and the remaining balance on the following day.
How Does It Impact You?
This will impact the amount of funds you receive on delivery sell transactions in the equity segment. Let’s say, you buy shares worth Rs 10,000 on Monday and sell them either on Tuesday or Wednesday. This will get you only Rs 6,000 (60% of 10,000) in your fund balance for you to trade. The remaining balance (Rs 4,000) will be available to you on Wednesday if you sold it on Tuesday. Or it will be available to you on Thursday if you sold it on Wednesday.
If you sell those shares on Thursday or later, you will get Rs 8,000 (80% of 10,000) in your fund balance and the remaining Rs. 2,000 the next day.
What’s Leading To This Change?
Now, let’s understand where this new distinction between T1 and Demat holdings is coming into the picture. To abide by the peak margin rules, brokerage firms transfer the shares from the client’s demat account to the exchange on the trade day itself. While T1 holdings are still in transit from exchange to client’s demat and not yet available in the demat, they cannot be settled the same day as demat holdings. Hence, brokerage firms are coming up with ways (if they haven’t already) to maintain the peak margin requirements arising from such trades.
Please note that we are currently working on providing T1 holdings labels in the portfolio that will help you to identify such holdings. It is expected to be available in the next couple of weeks. We will give you updates on this as soon as we can.
Conclusion
- From January 28th 2022, selling shares bought in the last 2 days (T1 holdings) will get you a credit balance of 60% of the total sell value.
- Selling shares from demat holdings will continue to get you the credit balance of 80% of the total sell value.
Disclaimer: Investments in the securities market are subject to market risks, read all the related documents carefully before investing. This content is purely for educational, information and investor awareness purpose only. Paytm Money Ltd SEBI Reg No. Broking – INZ000240532. NSE (90165), BSE(6707) Regd Office: 136, 1st Floor, Devika Tower, Nehru Place, Delhi – 110019
