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7 Faqs On Rmoney-India Margin Requirement You Need To Know

Margin amount in your trading account is the lifeblood for future and option trading. Not only this it is also important while dealing into cash segment of equity. Every future and option segment of equity, commodity or currency trading has its own margin requirement. These requirements are broadly the exchange driven requirement. The security and exchange board of India publishes principles on clients margin requirement. In turn stocks, commodities and currency exchanges in India come up and publishes regularly with such requirement. All brokers have to comply with such exchange margin requirement. However, there is flexibility on the amount that any broker can charge from its client. So let us understand Rmoney-India margin requirement. Understanding these requirements will help you deal with us smoothly.

Faqs On Rmoney-India Margin Requirement 

The following FAQs are hand-picked from the queries that first-time clients ask us when they are onboard into RMoney India family. Not only the newcomers in the family should understand all these margin requirements properly, but also to anyone who is interested in stocks, commodities and currency trading in India must be aware of all these before they actually begin their journey in the market.

1. Whether RMoney India collects margins from clients in the capital market segment?

In the case of capital market segment, popularly known as equity segment or cash segment, Rmoney-India margin requirement is simple and straightforward. RMoney-India has a prudent system of risk management that protects from client defaults. Furthermore, the margin is an important element of any such risk management system. RMoney-India well documents such risk measurement system and you can access it from our representatives. 

Here one important thing to note is that exchange does not fix the quantum of margin and the mode of collection of such margin from the clients. However, RMoney-India has set these margins as per the best practices in the industry.  Now coming to the actual margin in the cash segment, the following table will suffix our requirements on this end –

Segment 

RMoney-India Margin

Equity cash – delivery

One time on exchange margin

Equity cash intraday/MIS

One and half times on exchange margin

2. Whether RMoney India collects margins from clients in the F&O segment and currency derivatives segment? 

Unlike the cash segment, here in future and option segment, there is a mandatory requirement of margin from clients. We brokers need to collect initial margin from our clients on an upfront basis. Up front basis means that you need to pay in advance the initial margin to us before you start actual trading. It means such amount of initial margin must reflect in your trading account at the time you initiate your trade.

In a similar way, it is also mandatory to pay initial margin in case of both currency and commodity segment. In addition to the initial margin, some additional money for extreme loss margin, you also need to deposit on an upfront basis. The following are the margin requirement for future and option segment –

Segment 

RMoney-India Margin

Equity future-intraday           

Three times on exchange margin

Equity future-carry forward

One time on exchange margin

Commodity – intraday

Three times on exchange margin

Commodity – carry forward

One time on exchange margin

Besides these regular margins, we at RMoney-India have a special product for all our trading members. We provide bracket and cover order to all our clients who trade. The following table explains the margin requirement segment wise (percentage in brackets) and leverages on that margin- 

Segment

Product

RMoney-India Leverage and Margin

Capital Cover Order / Bracket Order

20x (5%)

Future – Stock Cover Order / Bracket Order

40x (2.5%)

Future – Index Cover Order / Bracket Order

67x (1.5%)

Option – Index Sell Cover Order / Bracket Order

Only NIFTY & Bank Nifty – 40x (2.5%)

Option – Stock Sell Cover Order / Bracket Order

Not Provided

Option – Buy Cover Order / Bracket Order

Not Provided

Commodity Cover Order / Bracket Order

Gold & Silver – 118x – (0.85%) of the Total Value of Contract

Crude, Copper, Alum, Zinc, Lead-  77x – (1.30%) of the Total Value of Contract

Currency Cover Order / Bracket Order

100X (1%)

3. In what form RMoney India collect margin from its clients? 

RMoney-India collects margins from the client, in any of the following forms. Before collecting margin RMoney-India ensures into account the risk management policy and liquidity aspects for each and every client.

  1. Clients free and unencumbered balances available with us in different segments of the exchange. Balances could be either funds or securities or both. Please remember that we can only show the balances in our clients trading account who has given POA in favor of RMoney-India to transfer the same for the purpose of margin. 
  2. Bank guarantee received towards the margin, issued by clients bank and discharged in favor of RMoney-India. 
  3. Banks fixed deposit receipts (FDRs) received towards margin lien marked in favor of the RMoney-India. 
  4. Securities in dematerialized form actively traded on the national exchanges, not declared as illiquid securities with appropriate hair cut. 
  5. Units of liquid mutual funds in dematerialized form, whose NAVs are available and which could be liquidated readily with appropriate hair cut. 
  6. Government securities and Treasury bills in electronic form with appropriate hair cut. 
  7. Free and unencumbered Balances (funds and securities) available with the RMoney-India of the respective client in different segments of any Stock Exchange, with specific authorization from the client, subject to certification by independent Chartered Accountant. 
  8. Securities given as margin which are sold in the cash market and the securities are in the pool account of the RMoney-India but are not given as early pay in towards an obligation to deliver shares in the capital market segment. We give the benefit of margin to our client until T+1 day from the sale of securities without any hair cut. 
  9. Any other such collaterals, as may be specified by NSCCL from time to time

4. Do RMoney-India consider securities other than those in the approval list of securities for the margin collection?  

Yes, RMoney India considers securities other than those in the approved list of securities for margin collection. We consider most of the liquid securities that are in dematerialized form and are actively traded on the stock exchanges. Also, please note that RMoney-India considers only securities which are specifically not declared as illiquid securities by any exchanges for reporting that client margin to the exchange.  

5. What are the related entities for a client, whose balances/securities that Rmoney-India considers for margin collection and reporting? 

The following are the related entities for a client whose balances and securities RMoney-India considers for margin collection and reporting. The margin that RMoney-India collects from its clients or are available in approved form from entities related to the client must be certified by an independent Chartered Accountant and with specific authorization or consent. The related entities include – 

  • Individuals and in case of partnership firm, that have a relationship as a spouse, dependent children and parents with clients 
  • Any coparceners in the case of HUF 

6. What does short reporting of margin mean?  In case of short reporting of margin do RMoney-India pass on the penalty to the clients?  

When a stockbroker like the RMoney-India fails to collect requisite margin from our client on an upfront basis and reports to the respective exchange that margin collected from the client is less than the actual amount of margins required to be collected as per the exchange requirements, it is short reporting of margin collection. Please note that such short reporting of margin collection generally attract applicable penalty from the clearing corporations. 

We may pass such penalties levied by the clearing corporation for short reporting of client margin to that client. However, we do so only when we have sufficient evidence to demonstrate that such client has not made payment of the required margins. Also, we keep the process transparent and provides relevant supporting documents for the same to that client. 

7. Does Rmoney-India provide the margin related information to clients regularly?

RMoney-India send margin related information to our clients on a daily basis and includes the following –  

  1. First, client code, name and trade day (T) 
  2. Second, the total margin deposit placed by the client on day T-1. We also give break-up in terms of cash, FDRs, BGs, and securities, if any
  3. Next, margin utilized up to the end of day T-1 
  4. After that, the margin deposit placed by the client on day T with the break-ups, if any
  5. Subsequently, the margin adjustments for day T 
  6. Lastly, the margin status (balance with the member / due from the client) at the end of day T 

Additionally, we maintain proper records of collateral received from our clients as under: 

  1. Firstly, the receipt of collateral from our client and acknowledgment that we issue to our client on receipt of such collateral 
  2. Secondly, the record of return of collateral to our clients 
  3. Lastly, the credit of corporate action benefits to clients 

RMoney-India has adequate systems and procedures to ensure that our client collateral is not being used for any purpose other than meeting the respective client’s margin requirements/pay-ins. 

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