What is Shares as Margin facility?
Shares as Margin is a facility with which you can generate instant trading limits using your existing shares lying in your demat account.
Why do I need Shares as Margin facility?
In situations where you are short of funds to take a position and would need some time to gather the required amount, Shares as Margin can help you generate limits instantly to trade in products like Flexi cash/ Margin Client mode and Margin broker mode. By using Shares as Margin, you can be assured that you will not be missing any market opportunity due to temporary shortage of funds.
How does Shares as Margin work?
All you need is to block the shares in your demat equivalent to the amount of margin that you require to take a position and within seconds you have the required margin to buy that stock.
What forms of Margin are acceptable for taking F&O and Equity positions?
For F&O and Equity positions, margin can be given in the following forms:
(a) Cash (by way of allocation of funds from your bank account)
(b) Specified securities (by way of pledging securities allocated from your demat account in favour of I-Sec).
The limit granted is a sum of (a) & (b) and the margin is blocked on the individual positions on the overall basis and not in any proportion of (a) & (b).
Though securities limit is granted for exposure to F&O and Equity positions, actual payment is required for settlement dues arising from mark-to-market losses on futures positions, premium payments for options bought, square off losses on futures,options and equity positions and brokerage applicable on the transactions.
When should cash be made available for settlement dues?
Cash should be made available upfront before execution of trade in any segment in your bank account as per the schedule in the 'Cash Projections' page. For example, all futures obligations are settled by exchange on T+1 basis but the scheduled date of debit from your bank account is day T itself.
What happens if cash is not made available for any settlement dues?
Pay-in is normally made from your allocation to F&O and Equity from your bank account. In case this allocation is insufficient, ICICI Securities reserves the right to debit even unallocated clear funds available in the bank account.
In case the allocation for F&O and Equity from your bank account is not sufficient to meet the pay-in obligations, ICICI Securities can sell appropriate quantity of securities pledged as margin. The proceeds of the securities sold on invocation will then be utilized to meet the pay-in obligations.
How do I revoke securities pledged as Margin?
A link for 'Unpledge' appears against the 'Quantity Pledged' in the 'Pledged Securities' link under The 'Shares As Margin' page. You can click on the link and specify the quantity to be withdrawn. In case, in the 'Status Book' sub-link under the 'Shares as Margin' link in the F&O and Equity section, there is already a 'Withdrawal' request pending to be initiated (i.e. in 'Requested' status), you will not be permitted to place a fresh withdrawal request; you can only increase the quantity to be withdrawn.
In either case, note that Withdrawal is:
(i) permissible only if the reduction in Securities limit arising out of reduction in the quantity deposited as margin is not beyond the current F&O and Equity limit
(ii)permitted only to the extent of quantity deposited has not already been sold either by ICICI Securities or by yourself (appearing as 'Block for Sale' in the 'Deposited Securities' page in the F&O and Equity section)
After revocation of pledge, by how much do limits decrease?
On revocation of securities deposited as margin, F&O and Equity limit decreases immediately after successful withdrawal, by the
(Quantity of the stock being withdrawn* Valuation Price of the stock ) * (1 - Haircut% for the stock)
What happens to the securities on revocation of pledge?
A separate request is created to initiate the revocation of the pledge(s). The status of this request can be tracked in the 'Status Book' sub-link under the 'Shares as Margin 'link in the F&O and Equity section. However, the quantity revoked is immediately reduced from 'Quantity' in the 'Pledged Securities' page in the F&O and Equity section. As a result, the securities limit also reduces.
Multiple pledge revocation may have to be initiated in case separate pledge order nos. by the Depository as a result of pledges being created at various points of time earlier. Once revocation is initiated (i.e. the status changes from 'Requested' to 'In Process' status), the same appear(s) in the 'Status Book' sub-link under the 'Shares as Margin' page in the F&O and Equity section. Here, you can view the final status of the pledge closure(s) initiated. Once, the pledge closure(s) are completed, the quantity closed will reflect as free balance in your demat account. The withdrawn securities will be available for sale or transfer on the next day of the withdrawal.
How do I deposit Securities as Margin?
Click on the 'Pledge & Create Limit' link on the 'Shares As Margin' Page available under the Equity and F&O section, you will find all your securities available in your demat which are free to be pledged there. You can specify the quantity you wish to pledge and place a pledge request. After placing the pledge request, you will receive a link from the depository on your registered mobile number and email id, you can confirm and authenticate your pledge request through the OTP provided to avail your SAM limit.
Can I deposit any security lying in my demat account as Margin?
We have enabled only select securities which meet the criteria for liquidity and volume for depositing as Margin. This list can be seen in the 'Stock List' page in the F&O and Equity section.
Further, balances of only these securities are available when you access the ''Pledge & Create Limit' sub-link as explained in the previous answer.
Inspite of being a security eligible for deposit, its deposit may not be permissible in either of the following scenarios :
(a) the value of the securities deposited is very small
(b) the value of the deposit of a particular security including previous deposits of the same security is in excess of a specified amount
(c) the securities limit arising out of securities deposited as margin including previous deposits is in excess of a specified amount
(d) the value of the deposit of a particular security including previous deposits of the same security including by other clients also is in excess of a specified amount
On depositing securities as margin, when do limits become available there against?
Limits become available against the shares deposited as margin after your pledge request has been successfully confirmed. You will be able to Move free securities limit directly from one segment to another i.e., from equity to FnO and vice-versa from the 'Allocate Limit' link under the 'Shares As Margin' page.
After depositing securities as margin, by how much do limits increase? Where can I view all securities deposited as margin?
On depositing securities, F&O limits and Equity limits increase after your pledge request has been successfully confirmed by the 'Limit to be created' indicated on the 'Pledge & Create Limit' page. This is arrived at for each security as per the following formula:
(Quantity of the stock deposited * Valuation Price of the stock ) * (1 - Haircut% for the stock)
The valuation price and haircut% are specified by ICICI Securities. Generally, the closing price of a stock on the previous day is specified as the valuation price. The haircut% for all eligible stocks can be seen in the 'Stock List' page in the (Equity andF&O) section. The valuation price and the haircut% for all stocks available for deposit can also be seen in the ''Pledge & Create Limit' page.
The limit arising out of securities deposited can be seen in the F&O and Equity limit page. Limit would be arrived by aggregating.
(a) Allocation of funds from back account (voluntary in the form of 'Bank Allocation and involuntary in the form of 'Block for Trade')
(b) Securities Deposited
(c) Settlement balances (net)
The details of how limit is arising from individual securities deposited can be seen in the F&O and Equity Deposited Securities page.
What does "Pledge & Allocate to Equity", "Pledge & Allocate to F&O" on the 'Pledge & Create Limit' page mean?
If you click on Pledge & Allocate to Equity while placing pledge request, the limits will be allocated to Equity Segment after the pledge request is confirmed.
If you click on Pledge & Allocate to F&O while placing pledge request, the limits will be allocated to F&O Segment after the pledge request is confirmed.
Why the limit arising out of securities deposited as margin changes every day and sometimes during the day also?
This is because it is dependent on the valuation of the securities deposited as margin. The F&O and Equity limits arising out of securities deposited as margin is arrived at as the summation of :
(Quantity of the stock deposited * Valuation Price of the stock ) * (1 - Haircut% for the stock)
Generally, the closing price of a stock on the previous day is specified as the valuation price. Hence, the limit arising out of securities deposited as margin is recalculated every day when the new closing price for the securities is received. Limit may also change on account of changes in haircut% effected by ICICI Securities. In some cases, the above changes may be carried out during trading hours also. These may lead to either an increase or a decrease in the limit arising from securities deposited as margin. ICICI Securities also reserves the right to withdraw the limit arising from any one or more of securities deposited as margin without assigning any reason.
Where the limit arising from securities deposited as margin reduces on account of the above, the margin available against the F&O and Equity positions/orders is reduced from any one or more positions/orders at the discretion of ICICI Securities. This may result in some positions having less than the minimum margins in case of futures positions leading to square off of the futures positions/cancellation of the orders. The trigger price for squaring off the option positions is also recalculated leader to earlier squaring off of option positions/cancellation of option orders.
Therefore, where you have taken F&O and Equity positions on the basis of limits arising from securities deposited as margin, you are advised to track the prices of such securities closely and ensure that sufficient margin is always made available for the positions/orders.
What happens to the securities pledged as margin?
When you create a pledge on securities in favour of I-Sec, a separate request is created to pledge each security. The status of these requests can be tracked in the 'Status Book' sub-link under the 'Shares as Margin' link in the F&O and Equity section. Till such time that the pledge creation is actually initiated by ICICI Securities on your behalf (i.e. the status changes from 'Requested' to 'In Process' status), the requested quantity appears as 'Pledge Requested Quantity' in the 'Demat Allocation' page in the Equity section.
In case you make a further deposit of the same security before the pledge request is initiated on your behalf (i.e. is in 'Requested' status), only the pledge request quantity is increased instead of creating a new pledge request.
You can view the pledge order no. allotted by the Depository for each pledge creation here in the Status Book.
How does ICICI Securities go about selling my pledged securities in case I do not make cash available for any settlement dues?
ICICI Securities would invoke a pledge and place a 'Spot sell' order at 'market' for the required quantity of securities deposited as margin the next morning. This will permit you to bring in funds in your bank account in the evening.
ICICI Securities would invoke the securities pledged in favour of ICICI Securities to debit the shares from your demat account and meet the obligations to pay-in the securities. On invocation, the 'Quantity' in the 'Pledged Securities' page will reduce. Details of such invocations would appear in the 'Status Book' sub-link under the 'Shares as Margin' link in the F&O and Equity section.
However, ICICI Securities may not resort to selling the deposited shares at its discretion including for reasons that the pay-in shortfall is insignificant.
For a given shortfall which is less than potential sale proceeds of the entire securities deposited as margin, how does ICICI Securities determine which of the deposited securities to sell and how much ?
To minimize the no. of sell orders, orders are first placed in respect of stocks which have the highest value (arising from greater quantity or greater prices). If the sale proceeds of the highest value stock does not appear to be sufficient to meet the pay-in obligations, the next highest value stock is taken up for sale.
For determining the quantity to be sold, the securities deposited as margin are valued at current market price.
For determining the quantity to be sold, the target amount to be realized is assumed to be higher by a sale margin to allow for possible price losses till the order reaches the market. The sale margin is standard for all the scrips enabled for 'Shares as Margin'.
The quantity determined is rounded off to the nearest higher integer.
Can I also sell securities pledged as margin for eg. In case prices of the securities are going up?
Yes, you can.
'A link for 'Spot Sell' appears against the 'Quantity' In the 'Pledged Securities' link under 'Shares As Margin' page. You can click on the link and then place a spot sell order. These orders can also be limit orders. In this case, the sale proceeds will be allocated automatically for F&O and Equity (you can reduce the same if required). Because of this, no reduction in securities limit occurs on placing the order. The quantity ordered to be sold will appear as 'Block for Sale'.
Of course, the sale is permitted only to the extent of quantity pledged that has not already been sold either by ICICI Securities or by yourself (appearing as 'Block for Sale' in the 'Pledged Securities ' page in the F&O and Equity section). However, if there is pending ''Revocation of pledge' request out of the 'pledged quantity', the quantity in that request is not permitted to be sold.
Spot brokerage is applicable on these sales. Such orders can be viewed in the Equity Order book (they will be identified as ) and modified/cancelled like other Equity orders.
ICICI Securities would invoke the securities pledged in favour of ICICI Securities to debit the shares from your demat account and meet the obligations to pay-in the securities. On invocation, the 'Quantity' in the 'Pledged Securities ' page will reduce. Details of such invocations would appear in the 'Pledge Book' sub-link under the 'Shares as Margin' link in the F&O and Equity section.
Are there any separate charges for the above transactions?
Yes, below pledge charges will be charged in accordance with depositories NSDL and CDSL. These charges are applicable on a per-ISIN basis in each instruction. Type of instructions: Initiation/Closure/Invocation. Rs 20 per ISIN instruction.
Can I place revocation and invocation of pledge requests simultaneously for the same scrip on the same date?
Yes, provided the status of first request (which can be either revocation or Invocation) is not shown as 'Requested/In process' in the Status Book. If showing requested/in process, system will not allow second request
Can I place multiple revocation of pledge requests against the same scrip on same date?
Yes, you can place further revocation of pledge requests if the earlier request(s)do not show the status as �In Process". The system will not allow you to place further revocation of pledge request(s) till the processing is completed.
How the delivery towards sell of SAM (Shares As Margin) Funded shares will be effected?
In case you sell the shares which are provided as Margin, ICICI Securities (I-Sec) shall invoke the pledge on such shares for meeting delivery obligation on sell transaction. This process will be followed irrespective of the fact whether the shares are being sold either by you /dealer or by risk trigger processed by I-Sec.
How does "Pledge & Allocate to NWB", on the 'Pledge & Create Limit' page works on 'ICICIdirect - Stock, F&O, MF' & 'Traderacer'?
If you click on Pledge & Allocate to NWB while placing pledge request, the limits will be allocated to Equity Segment after the pledge request is confirmed.
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