Margin Funding |
Definition |
Process |
Alternative Process |
Pros and Cons |
Shares Release |
Share release can be defined as: 1) Request received from client to release the shares available with MOFSL either as Off market or transfer to FO collateral. 2) Release of respective shares lying with MOFSL for client pay in if sold by client. |
1 ) Any shares release as off market is verified and duly approved by MOFSL Team once request received and processed accordingly, Client can request for shares transfer from MOFSL to FO segment in wire , if lying in free balance (clients POA) than it will get transfer ( as per FO approved list) 2) If client has sold or RMS selling has been done , Funding Team (at HO) will automatically releases the shares for pay in. |
NA |
1) If any request received for off market or FO transfer and shares are in pledge , first shares needs to be got released from bank and such request has to be received by 1.PM and the shares will be received on T+1 days, however if shares can be released will be approved by Funding team as an Risk Point of view , if this process is not followed there are chances that there will be pay in short outside MOSL if any. |
MOFSL Ledger |
MOFSL Ledger is the details of Funding Availed |
Ledger available in Biz ops under Reports >>statutory>> select MOFSL as company. |
NA |
NA |
Closure |
Client request to close the Funding A/c |
Closure documents has to be received at HO. Once received documents will be verified and can be closed if MOFSL ledger is Zero ( NIL) |
NA |
If discrepancies in closure request received and MOFSL ledger is not NIL , request will be rejected |
Limit updation |
Limit updation of Margin funding client is through system and is set in BOD process , however Client can requests for Additional Limit over and above set by the System |
Additional limit through Approval |
NA |
Pros:- Allows client to use more funds to buy shares. |
Cons:- Client can result in buying unapproved shares , Client also results in utilizing limit over and above sanctioned Limit , both this case can result in RMS selling / Margin Call / Shortage |
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MOFSL INTEREST |
An Interest is charged on the amount of funds used by the Client and has been calculated on the Daily basis (Ledger Balance) . Normally default interest rate is 16.25% PA, interest is charged on the funds used by the Client. Interest rate can differ to client as per approval matrix |
Through System & Approval Matrix and has been debited to client ledger on monthly , i.e. interest is debited on last day of the month |
NA |
NA |
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