Margin Trading Facility Q & A
How do I activate Margin Trading Facility?
Download the MTF activation form here. Sign across and send the Form to your Branch / Authorized Person / Head Office, and the Account will be activated.
Do I need to open a separate Demat Account to enable MTF?
No. Your existing Demat Account is enough to buy stocks in MTF.
What if the Account is in Normal Debit?
If your Account is in normal Debit, but you have collateral to transfer, you can buy new stock in MTF. However, the old Debit cannot be transferred to MTF. You can only avail MTF Benefits for the stocks purchased on that particular Day.
What if my Debit is older than 7 Days? Will I be able to purchase new stocks in MTF?
No. You cannot buy New Stocks in MTF if there is a Debit older than 7 Trading Days. You need to clear the Debit and only then you can buy the Stocks in MTF Account.
What about the Corporate Actions like Bonus, Dividend, Stock Split, and Rights Issue?
As the stocks are marked as pledged in your existing Demat account, You are automatically eligible for all corporate actions like Dividend,Bonus,Split,Buyback,Rights issue etc.
What are the benefits of buying stock in MTF at Pinnacle?
If you want to buy stocks worth 100,000 then you need to pay around 35,000 only and the rest of 65,000 is paid by Pinnacle and you become entitled to all the benefits of 100,000 worth of stock. Interest is charged only on Rs. 65,000 on a monthly basis.
Is it possible to replace the collateral?
Yes. You can replace the collateral from one stock to another.
What if the stocks bought under MTF get appreciated in value? Can I buy more stocks on this?
No. You will not get benefit in MTF for any increase on the value of your Funded Stocks.
How do I inform that I need to buy stocks in MTF?
Before 5:00pm, you need to send an Email to [email protected] from your registered Email ID stating the Stocks that you need to buy with MTF.
How much Margin do I need to pay to buy a Stock?
The margin payable varies from scrip to scrip. However the usual margin starts from 25-30%.
In what form do I need to keep the Margin?
You can transfer the fund in your Regular Equity Account, to be treated as Margin, or can make a separate Payment for Margin, or provide us the Securities in your Account to treat as MTF Margin.Margins for fresh requests should be in clear balance in account or shares. However shortfall in margins can be paid by way of cheque also.
What if while buying the stocks I do not have sufficient Margin?
If you do not have sufficient Margin, then you will not be allowed to buy stock using this Facility.
What are Margin Calls? What if I am unable to meet the Margin Call?
A Margin call is issued if your Margin goes down below the required percentage. Pinnacle will issue a Margin Call, if the stock value falls beyond a certain value or the value of collateral dips beyond a certain point.In case you are unable to pay up the required Margin within a period of 7 Days, then we shall liquidate your position to the extent of required Margin.In case Securities are given as a Collateral, then the fall in value of collateral also should be furnished by placing extra securities or paying by amount.
Is Short Selling allowed in Margin Trading Facility?
No. Short Selling is not allowed in Margin Trading Facility.
Can I sell the stock on the next day after the purchase of stocks in MTF?
Yes. You can sell the stocks anytime you want and there is no restriction on any time of selling the stock.
Can I use Margin Trading Facility on Derivatives Segment?
Margin Trading facility is not available in Derivatives Segment.
If my Equity Account has 2 Lacs Debit and today I buy stock worth 8 Lacs, will the MTF Benefit be available for 8 Lacs or 10 Lacs?
The MTF will happen for the 8 Lacs worth of purchased stocks, subject to availability of minimum Margin in the form of Cheque/Credit/Securities.
What is the list of stocks accepted as Collateral and on which I can avail the Funding Facility?
The first and foremost criteria for MTF is that shares should be listed on both the Exchange i.e BSE and NSE. Since Pinnacle provides MTF facility for NSE only, shares need to be mandatorily purchased in NSE exchange. In some rare scenarios, Funding available on particular scrip or not will be at the sole discretion of Pinnacle, even if stock is in approved list.Approved list changes every month. If a particular scrip is removed from MTF in subsequent months, then existing funding will still be available unless Pinnacle decides otherwise. Appropriate Notice will be given before the funding is withdrawn.The list of approved stocks can be downloaded from here.
Will my limits be released after squared off transaction, and can I use it further to take fresh position?
Once you square off the existing stocks in MTF, you can purchase new stock at the same time. There is no restriction on this.
What is the limit on my MTF Benefit? How much worth of stocks can I buy in MTF?
While enabling the MTF Facility, we set a limit on the MTF Account based on the financials and other data available with us. Once this limit is set, you are free to avail the MTF benefit at any point of time.
Are DP charges applicable, while using Margin Trading Facility?
No DP charges are applicable in MTF.
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