In order to regularly monitor the collection of margins by members and also to provide a reasonable time to members for collection of margins from their clients, the Forward Markets Commission (FMC) has decided to revise the instructions on short-collection/ non- collection of margins issued vide earlier circular No.6/6/2007-MKT-II dated 5th March 2010 as under.
This revised rate has been activated from 1st June 2014.
1. The ‘margins’ for this purpose shall mean mark to market margin, special / additional margin, delivery margin or any other margin as prescribed by the Exchange to be collected by member from their clients. 2. Penalty shall be levied as per the details given below on the members for short / non- collection of margins from their clients beyond T + 2 working days:
| For each member | |
| ‘a’ | Per day Penalty as % age of ‘a’ |
| (< Rs 1 lakh ) And (< 10% of applicable margin) | 0.5 |
| (>= Rs1 lakh) Or(>= 10% of applicable margin) | 1.0 |
Where a = Short – collection/Non-collection of margins per client per day. i) If short-collection/non-collection of margins of a client continue for more than three consecutive days after T+2 working days, then a penalty for 1% of the shortfall amount shall be levied for each day of continued short fall. ii) In case of short-collection /non collection of initial margins, the above penalty structure would be applicable from T day. iii) With respect to repeated defaulters, who default 3 times or more during a month, the penalty would be 5% of the shortfall in such instances.
Here an illustration is given below :
