Sebi's new rules explained in short points

Here we are going to explain SEBI's new rules in short and simple points so if you are an investor it is necessary for you  to know about this.

credit: Wikimedia commons

• So, first of all stocks will remain in your demat account itself and can be directly pledge to the clearing corporation. As the securities remain in investor's own demat so they can enjoy all corporate benefits on their stock.

• Here most of everyone is knowing about T+2 days rule of settlement, it means client should wait for 2 days after a trade to get his amount settled but an instant margin will be given in the place of unsettled amount. Some broker users already knowing about this like 5paisa brokerage was following this rule before 1 Sept also.

• In old rule, cash margins were taken care of by the broker. Either client has to give power of attorney (POA) to the broker or else he had to transfer his shares to the broker's account. And because of this some broker can misuse as POA is assigned to them.

• No Power of Attorney (POA) is to be assigned to brokers.

• Intraday profits cannot to be used to enter new trades.

• "Earlier collecting upfront margin wasn't mandatory, but under new system, investors will have to pay at least 30% margin upfront to avail a margin loan", says Angel Broking.

• Investors who want to avail margin will have to create margin  pledge separately. Before wit was not necessary but in new rule it is, like before we were enjoying more margin for example goodwill commodities providing margin of 15x and now it will not like this we need to pledge separately if we need margin to avail. 

• Investors cannot sell stock which they had bought yesterday. Investor can use intraday realised  profits for taking new positions on the same day. clients will able to use that amount after T+2 days only. In case of equity stocks once you receive the delivery of shares in your account.

Possibilities are that :According to our information this margin system can be get minimized in further times, the margin like 15x, 20x, 10x etc. can be changed into only 5x or maybe smaller than it also. But not now, it will take some time till Aug 2021 and later may be whether you go for 5paisa or Angel Broking etc. all brokers will be providing  same amount of margin and benefit as per new rules SEBI.