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Exemption for institutional deals

Institutional businesses i.e., transactions done by all institutional investors shall be exempt from margin payments. For this purpose, institutional investors shall include

  • Foreign Institutional Investors registered with SEBI. (FII)

  • Mutual Funds registered with SEBI. (MF)

  • Public Financial Institutions as defined under Section 4A of the Companies Act, 1956. (DFI)

  • Banks, i.e., a banking company as defined under Section 5(1)(c) of the Banking Regulations Act, 1949. (BNK)

  • Insurance companies registered with IRDA. (INS)

1 Institutional Transactions:

  • Institutional transactions shall be identified by the use of the participant code at the time of order entry.

  • Transactions entered into on behalf of custodial participants i.e. carrying custodial participant code shall be considered as institutional deals unless not confirmed by the respective custodians in which case the transactions shall be considered as a normal transactions and all applicable margins shall be levied on the members.

  • Non-Custodial Institutional Transactions shall be identified by the use of the participant code ‘NCIT’. The ‘NCIT’ transaction shall be exempted only for margin purposes and the settlement obligation shall remain with the member. Non-Custodial Institutional transactions, which are not marked, as ‘NCIT’ at the time of order entry, shall not be exempt from margins.

  • Members are required to enter only the above five categories, if applicable, while reporting Non-Custodial Institutional deals (NCIT) and contraction of unallocated OTRs.

  • Reporting and other procedures regarding ‘NCIT’ and Institution transactions shall continue as per the current procedure.

2 Retail Professional Clearing Member:

In case of transactions which are to be settled by Retail Professional Clearing Members (PCM), all the trades with PCM code shall be included in the trading member’s positions till the same are confirmed by the PCM. Margins shall be collected from respective trading members until confirmation of trades by PCM.

On confirmation of trades by PCM, such trades will be reduced from the positions of trading member and included in the positions of PCM. The PCM shall then be liable to pay margins on the same.

 

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