Monitoring of Margins
On receipt of a trade from a client account, the margin shall first be blocked from the value of the client collateral. If the client collateral is not sufficient, the residual margin shall be blocked from the TM proprietary collateral of the TM of such client. If the TM proprietary collateral is also not sufficient, then the residual margin shall be blocked from the CM proprietary collateral of the CM of such TM.In case of a trade from the proprietary account of a TM, the margin shall first be blocked from the TM proprietary collateral, and in case such collateral is not sufficient, then the residual margin shall be blocked from the CM proprietary collateral.Margins based on trades from proprietary account of the CM shall be blocked from the proprietary collateral of the CM only.“Client Collateral”, “TM Collateral” and “CM Collateral” shall mean the effective collateral (50:50 basis) considering the allocated collateral value plus the value of securities collateral provided through margin pledge/re-pledge by any individual client, TM and CM respectively to NSE Clearing. The TM/CM collateral shall mean the proprietary collateral of the TM/CM only and shall not include the collateral of any of their clients.
For monitoring of the risk reduction mode (90% utilization) and margin violation, the following shall be applicable:
TM level risk reduction mode: Client margin more than 90% of the client collateral shall be identified for each client under a TM. The total of such client margin more than 90% of the client collateral, plus the proprietary TM margin shall be assessed against the TM proprietary collateral for monitoring of TM level risk reduction mode.
CM level risk reduction mode: Sum of client margin more than 90% of the client collateral for each client under a TM plus the proprietary TM margin, more than 90% of TM proprietary collateral shall be calculated as TM margin more than 90% of TM collateral. Sum of such margin for each TM clearing through a CM, plus sum of client margin more than 90% of the client collateral for each client clearing through such CM, plus the proprietary CM margin shall be assessed against the proprietary CM collateral for monitoring of CM level risk reduction mode.