Mechanism for regular monitoring of and penalty for short-collection/non-collection of margins from clients

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....egulation Act, 1952 (FCRA) would continue to remain in force for a period of one year from the date on which FCRA was repealed (September 29, 2015), or till such time as notified by SEBI, whichever is earlier. 2. Erstwhile FMC, had prescribed mechanism for regular monitoring of and levy of penalty for short-collection/non-collection of margins from clients and had issued clarifications on the same from time to time. This circular is being issued to consolidate and update such norms prescribed by the erstwhile FMC. 3. The penalty structure and framework for short-collection/non-collection of margins by members from their clients shall be as under: i. The 'margins' for this purpose shall mean initial margin, extreme loss margin (ELM), mar....

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.... place a suitable mechanism to enable the members to report the collection of all margins from their clients at the end of each trading day and to report short collection/non-collection of all margins on the T+5 day. vii. All instances of non-reporting shall amount to 100% non-collection of margin and the penalty as prescribed above shall be charged on these instances in respect of non-collection. viii. The penalty shall be collected by the Exchanges not later than five days of the last working day of the trading month. ix. With respect to repeated defaulters, who default 3 times or more during a month, the penalty would be 5% of the shortfall in such instances.(Every short/non collection of margin is to be considered as one instance of ....