As per SEBI regulations, margin shortage penalty is levied on overnight positions held in trading account without sufficient margin as prescribed by exchange. For intraday positions shortfall margin penalty is not levied. It is levied in Equity Derivatives, Currency Derivatives and Commodity derivatives segments.
How is the penalty calculated?
If there is a debit balance per segment per day, and margin amount is less than 1 lac and also margin short fall amount is less than 10% then 0.5% penalty on shortage amount will be levied. If the shortfall is greater than 1 lac it is charged 1% of shortage amount.
|Penalty per day in %|
|< Rs 1 Lac and <10% of applicable margin||0.5|
|≥ Rs 1 Lac and ≥10% of applicable margin||1|
0.5% of penalty will be levied for first 3 days of debit. If the shortfall continues to 4th day then the penalty of 5% will be levied for each day from 4th day onwards.
If the shortfall is caused due to movement of 3% or more in nifty on any trading day then the shortage penalty will be charged only if shortfall continues to T+2 days.
With the available balance of Rs.10000, there is an overnight future position created with the margin of Rs.10000 on T day (This included span and exposure margin both as per exchange requirement). Due to market volatility, account is debited with the loss of Rs.2000 on same day. In this case, though the amount is less than 1 lac but the shortfall is greater than 10%. Hence, 1% penalty will be levied on the shortage amount (2000) on T+1 day. On each day till T+3 day the debit amount would be Rs.20 (2000*1%). If the shortage continues then from 4th day onwards the debit amount would be Rs. 100(2000*5%).