Peak Margin
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Sub: Introduction of Peak Margin
With reference to SEBI circular reference number SEBI/HO/MRD2/DCAP/CIR/P/2020/127 dated 20th July 2020, Peak Margin would be introduced in Equity, Commodity & Currency segment from 1st December 2020.
Following are the guidelines for collection of upfront margin from clients in Cash & Derivative segment: –
1. SEBI circular Exchanges/ Clearing Corporations have mandated trading members to collect applicable margins from their clients/ constituents in advance of the trade for all the segments i.e. Equity, Commodity &Currency.
2. MOFSL shall have to report the margin collected from each client for EOD as well as Peak margin during the day, in the following manner: a) EOD margin obligation of the client shall be compared with the respective client margin available with the Trading Member (TM)/Clearing Member (CM) at EOD. AND b) Peak margin obligation (Highest) of the client, during the day, shall be compared with respective client peak margin available with the TM/CM during the day. Higher of the shortfall in collection of the margin obligations at (a) and (b) above, shall be considered for levying of penalty as per the extant framework
3. The above framework will be prescribed in the phased manner as below
• Phase 1 (for 3 months from the date of implementation) – 25% of (Peak margin obligation of the client) shall be compared with respective client peak margin available with the TM/CM during the day.
• Phase 2 (for subsequent 3 months) – 50% of (Peak margin obligation of the client) shall be compared with respective client peak margin available with the TM/CM during the day.
• Phase 3 (for subsequent 3 months) – 75% of (Peak margin obligation of the client) shall be compared with respective client peak margin available with the TM/CM during the day.
• Phase 4 (subsequently) – 100% of (Peak margin obligation of the client) shall be compared with respective client peak margin available with the TM/CM during the day.
4. In cash market the peak margin will be applicable till T+2 till payin for the delivery positions.
5. Peak margin file will be sent by exchanges 4 times in a day at random time schedule, the maximum margin in any of the these files will be considered as peak margin for the day and margin will have to be complied based on the peak margin or EOD margin which is higher.
6. Please find below example of how Peak margin would be calculated:-
Case 1 | PEAK Margin | EOD Margin | |||
---|---|---|---|---|---|
Peak-1 | Peak-2 | Peak-3 | Peak-4 | ||
Cash | 10000 | 20000 | 30000 | 20000 | 0 |
EQ Derivative | 0 | 0 | 0 | 0 | |
Currency Derivative | 0 | 0 | 0 | 0 | |
Commodity Derivative | 0 | 0 | 0 | 0 | |
Peak Reportable Margin | 30000 | 0 | |||
Reportable Margin as per 1st Phase | 7500 | 0 | |||
Available Balance | 50000 | ||||
Shortage | 0 |
Case 2 | PEAK Margin | EOD Margin | |||
---|---|---|---|---|---|
Peak-1 | Peak-2 | Peak-3 | Peak-4 | ||
Cash | 10000 | 20000 | 300000 | 20000 | 40000 |
EQ Derivative | 0 | 0 | 0 | 0 | |
Currency Derivative | 0 | 0 | 0 | 0 | |
Commodity Derivative | 0 | 0 | 0 | 0 | |
Peak Reportable Margin | 300000 | ||||
Reportable Margin as per 1st Phase | 75000 | ||||
Available Balance | 50000 | ||||
Shortage | -25000 |
Case 3 | PEAK Margin | EOD Margin | |||
---|---|---|---|---|---|
Peak-1 | Peak-2 | Peak-3 | Peak-4 | ||
Cash | 10000 | 20000 | 20000 | 10000 | 90000 |
EQ Derivative | 50000 | 50000 | 80000 | 70000 | |
Currency Derivative | 5000 | 30000 | 0 | 7000 | |
Commodity Derivative | 0 | 0 | 0 | 0 | |
Peak Reportable Margin | 100000 | ||||
Reportable Margin as per 1st Phase | 25000 | ||||
Available Balance | 50000 | ||||
Shortage | -40000 |
Case 4 | PEAK Margin | EOD Margin | |||
---|---|---|---|---|---|
Peak-1 | Peak-2 | Peak-3 | Peak-4 | ||
Cash | 10000 | 20000 | 50000 | 10000 | 56000 |
EQ Derivative | 10000 | 50000 | 40000 | 70000 | |
Currency Derivative | 50000 | 8000 | 2000 | 5000 | |
Commodity Derivative | 100000 | 0 | 0 | 0 | |
Peak Reportable Margin | 170000 | ||||
Reportable Margin as per 1st Phase | 42500 | ||||
Available Balance | 50000 | ||||
Shortage | -6000 |
Case 5 | PEAK Margin | EOD Margin | |||
---|---|---|---|---|---|
Peak-1 | Peak-2 | Peak-3 | Peak-4 | ||
Cash | 10000 | 40000 | 50000 | 20000 | 0 |
EQ Derivative | 50000 | 0 | 0 | 0 | |
Currency Derivative | 0 | 0 | 0 | 0 | |
Commodity Derivative | 0 | 0 | 0 | 0 | |
Peak Reportable Margin | 60000 | 0 | |||
Reportable Margin as per 1st Phase | 15000 | 0 | |||
Available Balance | 50000 | ||||
Shortage | 0 |
Case 6 | PEAK Margin | EOD Margin | |||
---|---|---|---|---|---|
Peak-1 | Peak-2 | Peak-3 | Peak-4 | ||
Cash | 10000 | 20000 | 200000 | 70000 | 900000 |
EQ Derivative | 50000 | 50000 | 80000 | 10000 | |
Currency Derivative | 0 | 0 | 0 | 0 | |
Commodity Derivative | 0 | 0 | 0 | 0 | |
Peak Reportable Margin | 280000 | ||||
Reportable Margin as per 1st Phase | 70000 | ||||
Available Balance | 50000 | ||||
Shortage | -40000 |
Case 7 | PEAK Margin | EOD Margin | |||
---|---|---|---|---|---|
Peak-1 | Peak-2 | Peak-3 | Peak-4 | ||
Cash | 10000 | 20000 | 50000 | 10000 | 40000 |
EQ Derivative | 10000 | 50000 | 4000 | 70000 | |
Currency Derivative | 50000 | 8000 | 0 | 5000 | |
Commodity Derivative | 0 | 0 | 0 | 0 | |
Peak Reportable Margin | 85000 | ||||
Reportable Margin as per 1st Phase | 21250 | ||||
Available Balance | 50000 | ||||
Shortage | 0 |
Case 8 | PEAK Margin | EOD Margin | |||
---|---|---|---|---|---|
Peak-1 | Peak-2 | Peak-3 | Peak-4 | ||
Cash | 10000 | 20000 | 50000 | 10000 | 0 |
EQ Derivative | 10000 | 50000 | 4000 | 70000 | |
Currency Derivative | 50000 | 80000 | 2000 | 5000 | |
Commodity Derivative | 100000 | 0 | 0 | 0 | |
Peak Reportable Margin | 170000 | ||||
Reportable Margin as per 1st Phase | 42500 | ||||
Available Balance | 50000 | ||||
Shortage | 0 |