Margin obligations to be given by way of Pledge/Re-pledge in the Depository System

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....the way of 'margin pledge'. The operational mechanism for initiation, release and invocation of margin pledge is provided at Annexure A of the circular and para 41.11 of the Master Circular. 2. It has come to notice that after invocation of client's securities pledged in favor of demat account of brokers (i.e. 'Client Securities Margin Pledge Account' or 'Client Securities under Margin Funding Account'), such invoked shares are lying unsold resulting into the accumulation of clients' securities in demat account of the broker. The said accumulation does not serve the purpose for which securities were invoked i.e. realization of moneys. 3. Further, Brokers' Industry Standard Forum (Brokers' ISF) highlighted operational difficulties of broke....

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....brokers): In case of invocation of margin pledged securities (including pledged funded stock) of client by Trading member (TM), the invoked securities, other than mutual fund units that are not traded on the exchanges, shall be blocked for early pay-in in the client's demat account with a trail being maintained in TM/CM's 'Client Securities Margin Pledge Account' / 'Client Securities under Margin Funding Account'. The pay in block in client's demat account shall be subject to pay in validation i.e. only to the extent of delivery obligation of that client as provided by CCs to depositories. In case of invocation of Mutual fund (MF) units that are not traded on the exchange, depositories shall provide a functionality of single instruction....