Pledging Stocks as Collateral for MTF: A Step-by-Step Guide

As per the revised SEBI guidelines, pledging your stocks is mandatory for them to be used as collateral for Margin Trade Funding (MTF). Here's how you can complete the pledging process:

Step 1: Identify Stocks for Pledge: Begin by identifying the stocks in your holdings that you wish to pledge as collateral for MTF.

Step 2: Initiate Pledge Request

• Via Trading Platform:
  • Log in to your trading platform.
  • Navigate to the section where you can request to pledge stocks as collateral.
  • Watch this video to learn how to pledge stocks through the platform.
• Via Email: Alternatively, you can email the list of stocks you wish to pledge by visiting our Support Portal and submitting a request.

Step 3: Pledge Request Processing

• Timing: Requests submitted before 5 PM will be processed by the end of the day (EOD).
• Confirmation:
  • Once the pledge initiation process is completed, you will receive an SMS from NSDL, which will look like this: "Understanding the new margin pledge system".
  • The same information will be sent to your registered email address.

Step 4: Approve the Pledge

• Access the NSDL Page:
• Click on the link provided in the SMS or email.

This will take you to the NSDL page, where you will be prompted to enter your PAN number.

• Confirm Your Pledge:
  • After entering your PAN, you'll see a list of the stocks and quantities you requested to pledge.

• Select the checkboxes for the stocks you wish to pledge and confirm your selection.
• OTP Verification:
  • You will receive an OTP via SMS to your registered mobile number.
  • Enter this OTP on the NSDL page to finalize the pledge.

Step 5: Margin Availability

• T+1 Margin Provision:
  • Once the pledge is approved, margins will be provided against the pledged stocks starting from the next trading day (T+1).
• Pledging Fee:
  • A fee for pledging will be applied as there is a cost associated with the depository for creating the pledge and re-pledge.

Step 6: Selling Pledged Stocks

Request for Release:

• Pledged stocks will not be visible in your trading terminal. If you wish to sell any of these pledged stocks, send a request through our Support Portal before 1 PM.
• The stocks will be released and made available in your normal holdings the next day, allowing you to sell them online.

Important Points to Note While Pledging Stocks for MTF

1. Pledge Request Timing: All online pledge requests must be submitted before 5 PM on working days. Requests made after 5 PM will not be processed and will be removed at the end of the day.
2. Confirmation Process: After submitting a pledge request, you will receive an SMS and email from NSDL with a link to confirm the pledge. If you do not receive the SMS or email, you can use this common NSDL link to accept the pledge.
3. Confirmation Deadline: All pledge requests must be confirmed before 8 PM on the same day. If the confirmation is done after 8 PM, margin benefits will not be available for that day.
4. MTF Collateral Eligibility: Only clients who have activated the MTF segment are eligible to pledge stocks for MTF collateral benefits. Ensure your MTF segment is active before making a pledge request.
5. Non-Processing Days: Pledge requests made on Saturdays and Sundays will not be processed. Please plan your pledging activities accordingly.
6. Collateral Benefit Calculation: For MTF trading, the value of the pledged stocks after applying the haircut will be considered as collateral. The cash collateral ratio does not apply in this context.