Understanding Margin Calls in MTF

Margin calls are alerts triggered by Navia when your available margin falls below the required margin, as per SEBI norms.

How to Identify a Margin Call: You will receive an MTF statement daily via email, as long as you maintain positions under Margin Trade Funding (MTF). The statement includes detailed information about your margin status, as shown in the image below.

If the statement indicates a debit balance in the "Shortage/Excess in Margin" section, this signifies a margin call. A margin call occurs when the margin available is less than the required margin. It's essential to address this shortfall within 5 working days.

Actions Required in Case of a Margin Call:

If you receive a margin call, you have two options:

1. Cut Positions: Reduce your trading positions to free up margin.
2. Bring Funds/Stock Collateral: Deposit additional funds or pledge more stock collateral to cover the shortfall.

Consequences of Ignoring a Margin Call:

If you fail to meet the margin call requirements within the stipulated time, Navia's Risk Management System (RMS) may liquidate or sell your funded shares and collateral to cover the margin shortfall. This action is in line with SEBI regulations, which mandate that margin shortfalls must be addressed promptly.