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TMI BlogMechanism for regular monitoring of and penalty for short-collection/non-collection of margins from clientsX X X X Extracts X X X X X X X X Extracts X X X X ..... tions under the Forward Contracts Regulation Act, 1952 (FCRA) would continue to remain in force for a period of one year from the date on which FCRA was repealed (September 29, 2015), or till such time as notified by SEBI, whichever is earlier. 2.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 initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgins per client per day v. In case of short-collection /non collection of initial margins, the above penalty structure would be applicable from T day. vi. The Exchanges should put in 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 rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xiv. In exceptional situations wherein members and/or clients were not in position to square off the open positions to avoid levy of penalty for margin shortfall due to lack of adequate liquidity and/or high market volatility, exchanges may take a suitable decision depending upon the merit of the circumstances and keep SEBI informed of the same. Further, the exchanges are directed to take such exceptional matters to their Board of Directors for decision. 4. The provisions of this circular shall come into effect immediately. 5. Exchanges are advised to bring the provisions of this circular to the notice of their members and also to disseminate the same on their website. 6. This circular is issued in exercise of the powers confer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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