MTF Terms & Conditions

Introduction

Margin Trading Facility (“MTF”) is offered by Finvasia Securities Private Limited (“Shoonya”) in accordance with the guidelines issued by the Securities and Exchange Board of India (SEBI) and the Stock Exchanges, and as per the internal risk management policy of Shoonya.

1. Margin Trading Facility
Margin Trading Facility (MTF) enables clients to purchase eligible securities by paying a portion of the transaction value using their own funds, while the remaining amount is funded by Shoonya.

Under this facility, eligible clients may avail up to 3X margin, subject to the margin requirement applicable to the selected security, Shoonya’s internal risk management policy, and applicable regulatory and Exchange guidelines.

The actual buying power and margin requirement may vary across securities. Securities with higher applicable margin requirements may provide lower buying power.

The funding amount and buying power available under MTF may be revised from time to time at the discretion of Shoonya, in accordance with its internal risk management policy and applicable regulatory and Exchange limits.

To secure MTF exposure, clients shall provide margin in the form of cash only in Shoonya.

2. Eligible Securities

MTF shall be available only for Group I securities as permitted by the Exchange.

Applicable Margin Requirements:

• Group I (F&O Stocks):
  • Margin is calculated as VAR + 3 x ELM or 33.33%, whichever is higher
• Group I (Non-F&O Stocks & ETFs):
  • Margin is calculated as VAR + 5 x ELM or 33.33%, whichever is higher

Shoonya reserves the right to revise the list of eligible securities and applicable exposure limits at any time, at its sole discretion and in accordance with its Risk Management Policy.

3. Margin Requirement

Clients are required to maintain margins as prescribed by SEBI/Exchanges or higher margins as determined by Shoonya at all times.

Additionally, Shoonya reserves the right to levy margins higher than those prescribed by the Exchange, in accordance with its risk management policy.

Any margin shortfall may attract penalties as per applicable Exchange regulations.

Shoonya reserves the right to revise margin requirements at any time without prior notice. Such decisions shall be final and binding on the Client, and Shoonya shall not be required to provide any reasons for such revisions.

4. Exposure Limits

Exposure under the MTF facility shall be subject to limits determined by Shoonya from time to time also mention in MTF risk policy accordingly. Users must read the risk policy before availing MTF in Shoonya.

No, Client shall be provided exposure beyond the max funding limits defined under Shoonya’s internal risk management framework and applicable Exchange margin trading funding norms.

5. Mandatory DDPI

Clients intending to avail the MTF facility must mandatorily subscribe to Demat Debit and Pledge Instruction (DDPI) in favour of Shoonya.

6. Change in Eligibility of Securities

• If any eligible MTF-approved stock moves out of the Group I list, or from the EQ series at any time during the month, the stock shall no longer be eligible for fresh MTF funding from the effective date of such reclassification. Existing MTF positions shall continue to be monitored under the Risk Management Policy and shall be subject to the revised applicable margin requirements, including a 100% margin requirement wherever applicable, or as per the prevailing Shoonya risk management framework as below.
• The client must liquidate or convert the position within 6 days of the date of reclassification.
• If the client fails to meet the applicable margin requirements, Shoonya reserves the right to liquidate the position after the 6th day or earlier, depending on prevailing market conditions and RMS requirements.
• Shoonya squares off positions one day before the ex-date for specific corporate actions like mergers. This doesn't apply to bonuses, dividends, and rights issues.
• Shoonya reserves the right to restrict or suspend fresh MTF funding in securities that are subject to upcoming corporate actions, including merger and demerger events, based on its internal risk assessment.

7. Margin Shortfall and Square-Off

Any notification in the Mobile App, Web login, EXE version, or other communication channels specifying the margin shortfall amount shall be treated as a margin call notice.

The Client shall deposit/pay the margin shortfall amount immediately upon receipt of such notification.

If the Client fails to maintain the required margin:

• Shoonya reserves the right to square off the Client’s position at prevailing market prices.
• Shares associated with the position may be invoked or liquidated to recover dues.
• All statutory charges, transaction charges, and other costs shall be borne by the Client.

8. Margin Release

Upon square-off of the position (whether by the Client or by Shoonya), margins shall be released after settlement as per Exchange/Clearing Corporation settlement timelines.

9. Validity of MTF Position / Maximum Holding Period

Under Shoonya’s Margin Trading Facility (MTF), positions may be held for a maximum period of 365 days, subject to the Client maintaining the required margin at all times.

The validity of an MTF position shall be reviewed and determined by Shoonya from time to time.

In the event of any margin shortfall or overdue amounts, Shoonya reserves the right to square off the positions in accordance with applicable scrip-wise guidelines and internal risk management policies.

Clients are required to close or convert their MTF positions within the permitted timeline by either:

• Paying the funded amount and taking delivery of the shares; or
• Squaring off the position.

Any position remaining beyond the permitted period may be squared off by Shoonya at prevailing market prices on a best-effort basis.

Shoonya shall not be liable for any losses arising from such square-off.

10. Margin Trading Facility (MTF) – Tariff Sheet

*Interest charges shall be applicable from the date of funds pay-in to the Exchange until the date of funds payout received after square-off or closure of the MTF position.

11. Mark-to-Market (MTM) Monitoring

(Client-Level – Combined Across Positions)

In case 80% of the available margin is eroded at the Client level across all products (including MTF), it will trigger an immediate square-off of all open positions.

This includes MTF positions and other holdings and trading positions, in accordance with the applicable Risk Management Policy.

Such square-off will be executed without any further notice or margin call.

12. Client Responsibility for Margin Calls

Upon margin falling to the level defined in the MTF risk policy, Shoonya shall be entitled to immediately, and without any reference or intimation to the Client, liquidate all or any of the securities and forthwith transfer or appropriate proceeds towards repayment of the MTF facility.

The Client shall be solely responsible for any loss, damages, costs, etc., arising therefrom.

Failure to fulfil margin requirements may result in:

• Conversion of MTF positions to delivery (if funds are available) as per Risk management policy.

13. Pay-in / Payout of Securities and Consequences

In case there is a shortfall in receipt of securities against the buy position of the Client, such shortfall shall be dealt with in the following manner:

If there is a payout shortage on the settlement day for bought MTF positions, the same would be converted to normal delivery in the Client’s account.

The shares thus received on the Settlement Date or under auction payout would be delivered to the Client’s demat account upon full payment of the position; otherwise, they would be held in the CUSPA account.

The Client must make payment for the unpaid part within the timelines prescribed under regulatory norms; failing which, such shares shall be squared off by the end of such timeline.

Any close-out credit received shall be credited to the Client account.

Under both the above scenarios, Shoonya shall first recover:

• Funded amount
• Applicable charges

Only the remaining balance shall be credited to the Client ledger.

14. Event of Default

Events of default shall include, but are not limited to:

• Non-payment of MTF dues or interest
• Failure to maintain required margin
• Non-compliance with risk policies
• Death, insolvency, or incapacity of the Client
• Any other event deemed as default by Shoonya

Consequences:

• Immediate recall of MTF dues
• Liquidation/square-off of securities without notice
• Recovery of shortfall from the Client
• No liability on Shoonya for losses arising from such actions

15. Undertakings

To satisfy any obligation or dues under MTF, funds from the Client’s normal ledger may be moved to the MTF ledger by passing a journal voucher (JV).

Clients shall remain fully responsible for clearing all dues payable to Shoonya, including:

• Funded amount
• Interest
• Taxes
• Statutory charges

Upon square-off:

Sale proceeds shall first be adjusted towards:

• Funded amount
• Applicable taxes
• Charges
• Upfront margin

Only the remaining balance, if any, will be credited to the Client account.

Margin Shortfall Penalty

Clients shall be responsible for any penalties arising due to margin shortfall.

Exchange Reporting

The Client understands that Shoonya shall report Client MTF positions, collateral details, and other required information to Stock Exchanges on a daily basis as per regulatory requirements.

Modification of Terms

The Client understands that Shoonya reserves the right to modify any terms related to the Margin Trading Facility.

Any regulatory or operational changes shall apply upon due intimation to the Client via display on the website and/or app.

It shall be the responsibility of the Client to review such communications.

16. Miscellaneous

(a) The Client agrees to indemnify and hold harmless Shoonya, its affiliates, directors, employees, and agents from and against any liability, loss, or costs arising from breach of these Terms and Conditions or applicable law by the Client.

Shoonya’s liability, if any, shall be limited to the maximum liability prescribed under applicable law or Exchange directions.

(b) Shoonya reserves the right to deny the Margin Trading Facility to any Client without assigning any reason.
If any breach or fraud is detected, the Client shall be liable to compensate Shoonya for all financial losses, including legal and technical costs.

The Client may also be subject to legal action.

(c) Shoonya may withdraw the MTF facility by providing up to 30 days’ notice to Clients.

Clients must settle all positions and clear outstanding dues within the specified period.

(d) The Client agrees that he/she shall be liable for any loss (including opportunity or notional loss), damages, fines, penalties, charges, costs, or expenses arising due to interruption, malfunction, error, non-availability, or technical glitch of any nature in the trading platform.

The Client shall not have any claim or complaint against Shoonya arising from such incidents.

Mode of Communication

The Client acknowledges that communications including order confirmations, margin calls, liquidation notices, positions, exposure statements, and policy updates shall be deemed valid if delivered electronically.

Communication may be transmitted via:

• Registered email
• SMS
• Shoonya website
• Mobile application

Electronic delivery shall constitute valid legal notice.

Regulatory Changes

The Client understands that any changes introduced by regulatory authorities regarding the functioning of MTF shall automatically apply to the Client’s positions.

17. Dispute Resolution

Any dispute arising between the Client and Shoonya in relation to MTF shall be addressed through:

• Investor Grievance Redressal Mechanism
• Online Dispute Resolution (ODR) as per SEBI and Stock Exchange norms.

RIGHTS & OBLIGATIONS OF STOCK BROKERS & CLIENTS FOR MARGIN TRADING FACILITY (MTF) - NSE

CLIENT RIGHTS

1. Client shall receive all communications in a mode mutually agreed between the broker and the client regarding confirmation of orders/trades, margin calls, decision to liquidate the position / security.
2. Client shall be free to take the delivery of the securities at any time by repaying the amounts that was paid by the Stock Broker to the Exchange towards securities after paying all dues.
3. Client has a right to change the securities collateral offered for Margin Trading Facility at any time so long as the securities so offered are approved for margin trading facility.
4. Client may close / terminate the Margin Trading Account at any time after paying the dues.

CLIENT OBLIGATIONS

1. Client shall, in writing in his own hand or in any irrefutable electronic method, agree to avail of Margin Trading Facility in accordance with the terms and conditions of Margin Trading Facility offered by the broker, method of communication for confirmation of orders/trades, margin calls and calls for liquidation of collateral/security/position.
2. Client shall inform the broker of its intent to shift the identified transaction under Margin Trading Facility within the time lines specified by the broker failing which the transaction will be treated under the normal trading facility
3. Client shall place the margin amounts as the Stock Broker may specify to the client from time to time.
4. On receipt of ‘margin call’, the client shall make good such deficiency in the amount of margin placed with the Stock Broker within such time as the Stock Broker may specify.
5. By agreeing to avail Margin Trading Facility with the broker, client is deemed to have authorized the broker to retain and/or pledge the securities provided as collateral or purchased under the Margin Trading Facility till the amount due in respect of the said transaction including the dues to the broker is paid in full by the client.
6. Client shall lodge protest or disagreement with any transaction done under the margin trading facility within the timelines as may be agreed between the client and broker.

STOCK BROKER RIGHTS

1. Stock Broker and client may agree between themselves the terms and condition including commercial terms if any before commencement of MTF.
2. Stock broker may set up its own risk management policy that will be applicable to the transactions done under the Margin Trading Facility. Stock broker may make amendments there to at any time but give effect to such policy after the amendments are duly communicated to the clients registered under the Margin Trading Facility.
3. The broker has a right to retain and/or pledge the securities provided as collateral or the securities bought by the client under the Margin Trading Facility.
4. The broker may liquidate the securities if the client fails to meet the margin call made by the broker as mutually agreed of liquidation terms but not exceeding 5 working days from the day of margin call.
   

STOCK BROKER OBLIGATIONS

1. Stock broker shall agree with the client the terms and condition before extending Margin Trading Facility to such client. However, for clients who already have existing trading relationship and want to avail of Margin Trading Facility, stock broker may take consent in writing in his own hand or in any irrefutable electronic method after stock broker has communicated the terms and conditions of Margin Trading Facility to such existing clients.
2. The terms and conditions of Margin Trading Facility shall be identified separately, in a distinct section if given as a part of account opening agreement.
3. The mode of communication of order confirmation, margin calls or liquidation of position/security shall be as agreed between the broker and the client and shall be in writing in his own hand or in any irrefutable electronic method. Stock broker shall prescribe and communicate its margin policies on haircuts/ VAR margins subject to minimum requirements specified by SEBI and exchanges from time to time.
4. The Stock Broker shall monitor and review on a continuous basis the client’s positions with regard to MTF. It is desirable that appropriate alert mechanism is set up through which clients are alerted on possible breach of margin requirements.
5. Any transaction to be considered for exposure to MTF shall be determined as per the policy of the broker provided that such determination shall happen not later than T + 1 day.
6. If the transaction is entered under margin trading account, there will not be any further confirmation that it is margin trading transaction other than contract note.
7. In case the determination happens after the issuance of contract, the broker shall issue appropriate records to communicate to Client the change in status of transaction from Normal to Margin trading and should include information like the original contract number and the margin statement and the changed data.
8. The Stock Broker shall make a ‘margin call’ requiring the client to place such margin; any such call shall clearly indicate the additional/deficient margin to be made good.
9. Time period for liquidation of position/security shall be in accordance declared policy of the broker as applicable to all MTF clients consistently. However, the same should not be later than 5 working (trading) days from the day of ‘margin call’. If securities are liquidated, the contract note issued for such margin call related transactions shall carry an asterisk or identifier that the transaction has arisen out of margin call.
10. The daily margin statements sent by broker to the client shall identify the margin/collateral for Margin Trading separately.
11. Margin Trading Accounts where there was no transactions for 90 days shall be settled immediately.
12. The stocks deposited as collateral with the stock broker for availing margin trading facility (Collaterals) and the stocks purchased under the margin trading facility (Funded stocks) shall be identifiable separately and there shall not be any comingling for the purpose of computing funding amount;
13. Stock Broker shall close/terminate the account of the client forthwith upon receipt of such request from the client subject to the condition that the client has paid dues under Margin Trading Facility.

TERMINATION OF RELATIONSHIP

1. The margin trading arrangement between the stock broker and the client shall be terminated; if the Stock Exchange, for any reason, withdraws the margin trading facility provided to the Stock Broker or the Stock Broker surrenders the facility or the Stock Broker ceases to be a member of the stock exchange.
2. The MTF facility may be withdrawn by the broker, in the event of client committing any breach of any terms or conditions therein or at anytime after due intimation to client allowing such time to liquidate the MTF position as per the agreed liquidation terms without assigning any reason. Similarly, client may opt to terminate the margin trading facility in the event of broker committing any breach of any terms or conditions therein or for any other reason.
3. In the event of termination of this arrangement, the client shall forthwith settle the dues of the Stock Broker. The Stock Broker shall be entitled to immediately adjust the Margin Amount against the dues of the client, and the client hereby authorizes the Stock Broker to make such adjustment.
4. After such adjustment, if any further amount is due from the client to the Stock Broker, the client shall settle the same forthwith. Upon full settlement of all the dues of the client to the Stock Broker, the Stock Broker shall release the balance amount to the client.
5. If the client opts to terminate the margin trading facility, broker shall forthwith return to the client all the collaterals provided and funded securities retained on payment of all the dues by clients.