Depositories and clearing corporations on Friday said significant amount of margin pledges and repledges have seamlessly been processed since the new mechanism kicked in and they expect the process to stabilise in the coming week.
The new mechanism on 'pledge and re-pledge' came into force from September 1.
"Whilst significant amount of margin pledges / repledges have seamlessly been processed since September 1, 2020, we expect the new margin pledge process to stabilize in the coming week and the transition to normalize shortly," according to a joint statement issued by depositories CDSL and NSDL and clearing corporations ICCL and NSE Clearing Ltd. The statement comes a day after stock brokers' association Anmi requested markets regulator Sebi to postpone the penalty provisions on the cash and derivative segment till September 15, saying systems were not geared and tested fully, in spite of the assertions of market infrastructure institutions. In the new system, stock brokers will have to collect margins from investors upfront for any purchase or sale of shares and failure to do so will attract a penalty.
In its letter on Thursday, Anmi mentioned that there are inordinate delays happening at each level of the margin pledge process with clearing corporations and depositories.
The Association of National Exchanges Members of India (Anmi), a grouping comprising around 900 stock brokers from across the country, said forced implementation of the new margin system has derailed the entire settlement cycle of stock exchanges and clearing corporations. "Investors are badly affected too, as regular pay-in and pay-out of funds and shares isn't happening since last two days resulting in members involuntarily contravening the provisions of applicable regulatory directions," it added.
There are multiple technical glitches with regards to release of securities, one time passwords (OTPs), pledge and re-pledge issues, delay in pay-in and pay-out process, thereby resulting in disruptions in margin collections, the brokers' association had pointed out.