Your positions may be squared under the following circumstances:
Insufficient Margin: If the required margin is not maintained to hold the position.
Reduced Collateral Value: If the collateral value from pledged stocks decreases due to increased haircuts or a drop in the stock value.
Intraday Position Closure: If the intraday positions are not closed before the designated square-off time.
T5 Stock Liquidation: If T5 stocks are liquidated to cover a debit amount.
Staggered Period Margin Requirements: If there is an increase in margin requirements during the staggered period, resulting in a short, the position may be reduced accordingly.
Final Day of Expiry in Staggered Period: On the last day of expiry, to avoid the risk of physical delivery, positions may be reduced if: -the client has an open short position without holding the underlying stock -the short position is on margin and does not meet the required margin obligations.
Auto square-off means system checks the open position under intraday/ margin product at pre-defined time and to close the position the square off order is placed after cancelling the pending order. The said order gets executed in the market and open position is squared off accordingly.
In order to further streamline the process of handling client securities and prevent misuse, SEBI has mandated brokers to open a Client Unpaid Securities Pledgee Account (CUSPA).
Equity trades are settled on T+1, where T refers to the trade day.
Brokers are required to credit securities to the buyer's account within 1 working day of the settlement day.
If the buyer fails to meet his fund obligation by the settlement day, the securities will be transferred to the buyer's demat account along with the creation of an auto-pledge in favour of Religare Client’s CUSPA Account.
If the client fulfills the fund obligation within 4 trading days from the pay-out day (T+1+3), the pledge will be released and the securities will be available as free balance in the client's demat account.
If the client fails to fulfill the fund obligation within 4 trading days from the pay-out day (T+1+3), the securities will be sold in the market on T+1+4 to recover debits or dues, including penalties, interest, DP charges, etc.