QUESTIONS
SMTF is a SEBI approved Margin Trading Funding product which is offered by
What is SMTF ?
How do I activate SMTF facility?
Do I have to open another trading account for SMTF facility?
Which scrips are allowed in SMTF?
SMTF Can I take position in SMTF on unapproved stocks?
How much funding limit one can get in SMTF?
If funding limit gets over, what will happen?
If my normal ledger is in debit and also SMTF is in debit, then do I have to
clear the Normal Ledger on T+2+5 day?
If client has one stock in both accounts (SMTF and Normal), which stock
will be sold first?
If SMTF limit is fully utilized, can I get further funding on eligible stocks?
Will broker sell SMTF stocks on T+2+5 day ?
Does client have to pay margin call of SMTF?
Is SMTF account liable to be settled on quarterly basis?
ANSWERS
MSFL. In SMTF buying of stocks by making margin payments is allowed to client
and the remaining amount is funded by the broker. In SMTF client may carry
forward his/her outstanding beyond 7 days by paying margin amount. Interest up
to 18% will be charged on the funded /Debit amount. Margin may be paid in the
form of cash or MTF approved stock as collateral
A broking client has to activate SMTF by submitting a signed request letter and has
to agree to the Rights and Obligations document governing SMTF of Marwadi
Shares and Finance Limited.
A new trading account is not required. In the existing trading account, this
facility / service is provided.
Stock exchange approved eligible scrips are allowed. Exchange declares list of
eligible scrips (for SMTF) on monthly basis and the scrips shall be subject to
change by exchanges. MSFL allows SMTF facility in a scrip when it is listed and
approved by both exchanges (NSE and BSE)
No, one cannot take SMTF position on unapproved stocks.
It depends upon the client’s ledger credit / eligible margin stocks which is listed
and approved by both exchanges (NSE and BSE) OR MSFL at its own discretion
may set a funding limit for any particular client.
If funding (SMTF) limit is over, debit will arise in normal broking account.
Yes, you have to clear Normal ledger on T+2+5 day, as per exchange regulations.
If client has 100 reliance, 50 shares is in SMTF and 50 shares in Normal account,
first priority is to debit the trades from normal account.
Yes, if you have an eligible stocks and want to get further funding, you have to ask
your broker first.
Yes, If value of collateral provided as margin goes down as compared to the
No
margin required, client has to fulfill margin call. If value of funded stock also goes
down, so that the SMTF loss and the margin requirement exceeds the collateral
available,
No. margin call will be made and client need to fulfill the same.
In case the client has excess margins available in the books, then as per exchange
norms, excess margin with MSFL will be released under settlement cycle of the
client.