What is margin penalty and how does it work?
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Short collection for each client
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Penalty percentage
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(< Rs 1 lakh) And (< 10% of applicable margin)
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0.5%
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| (>= Rs 1 lakh) Or (>= 10% of applicable margin) | 1.0% |
If there are more than 5 instances of short collection in a calendar month, then penalty at the rate of 5% is charged for every further instance of shortfall.
For MCX, if the margin shortage is reported for a client 3 times or more during a month, i.e., either in consecutive instances or in 3 different instances, the penalty would be 5% of the shortfall from the 4th instance of the shortfall.
Learn more about margin penalties on the NSE website .
Note: GST at applicable rates (currently, 18%) is levied on the penalty amount.
In case you incur a margin penalty, the cut-off/ due date for reporting margin is T+5 days, so we post the entry on your ledger once we get the penalty file from the exchange i.e on T+6 day. The penalty is applied as a percentage of the non-upfront shortfall ( i,e MTM shortfall / additional margin shortfall / physical delivery margin short fall) amount and is posted in your ledger with the narration "Being CFX/F&O/MCX/Equity Margin Penalty Charges for the Trade Date".
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