Discontinuation of FD as margin from 15th Dec 2023
Hello traders!
As a part of SEBI and exchange guideline, we are discontinuing FD as margin product.
Why the change?
As per SEBI’s circular on upstreaming of funds to Clearing Corporation, the regulators have notified that Fixed Deposits are included as part of funds. Hence brokers cannot use FD pledge and provide margin to customers.
What happens to my FD now?
Since you had pledged your FD in favour of Kotak Securities and secured trading margin against the same, we will reduce the Trading margin and then unpledge/remove lien on the Fixed deposit post 15th Dec 2023.
Does this affect my Bank Fixed deposit in any way?
Not at all. Your Fixed deposit remains intact and any interest earned on the FD will be credited to your account as per normal process.
Do I need to go to the bank branch to unpledge/remove lien on my FD?
Not at all. The reduction of trading margin and unpledge/lien removal of FD will happen online after 15th Dec 2023. In case your FD is not unpledged/lien is not removed within 7 working days, you can reach out to our customer service and they will process the same.
How can I seamlessly adapt to new changes?
After 15th December 2023 please maintain sufficient margin if you have any open positions that were created using FDs as margin.
To prevent margin shortfall, add funds to your account or use existing holdings (stocks, ETFs, Mutual Funds, Gsec, or SGBs) as collateral for additional margin before 15th December 2023.
What other instruments can I use to get trading margin?
Going forward, you can explore providing margin in the form of funds and/or securities like:
- Liquid ETFs
- Government securities (G-sec)
- Sovereign Gold Bonds (SGB)
- Debt Mutual funds
The list of securities accepted as cash/non-cash collateral can be checked here.