Margin Trading (MTF) FAQs

1. How do I activate Margin Trading Facility?

It’s very simple, online. Just follow anyone of the below steps:

I. Email: Mail to helpdesk@edelweiss.in from your registered email address.

a. Subject Line: Activate Margin Trading <Account Code>.
b. (EG: Activate Margin Trading EB000192)

II. Website:
a. Login to www.edelweiss.in
b. Accept Terms and Conditions for Margin Trading in the pop-up window that you
come across.

III. Edelweiss Mobile Trader App:

a. Login to Edelweiss Mobile Trader
b. Accept Terms and Conditions for Margin Trading in the pop-up window that you
come across.

IV. Call your Equity Advisor

V. Call Customer Care: Call Toll Free at 1800 102 3335

2. How long it will take to activate Margin Trading Facility after giving request/consent to
enable it?
If you have given your consent by any of the above modes before 3.30 PM (working day), your
request will be processed at the end of day and you will be able to use Margin Trading Facility from
next working day. Requests received after 3.30PM (Working day) will be processed on the next
working day and you will be able to use the Margin Trading facility on T+2 day onwards.

The below category of clients are not allowed to trade in MTF:

 Employees
 LAS_MTF active
 Dormant Clients

In case, if you have given consent but still not activated, please check if the client is employee, LAS
MTF active or is dormant in CIP.
Another case, can be if the client is shifted from CAS to EFA or EFA to CAS. If MTF was activated
earlier and got deactivated due to internal shifting from CAS to EFA or EFA to CAS, connect with Mid-
Office team
3. What is the benefit of Margin Trading Facility?

o You can carry equity cash delivery position by maintaining margin only. The margin can be in
the form of stocks or cash.
o Up to 4.4x leverage
o Longer holding period
o Fungibility of limits across all segments
o No blocking of segment till the time minimum margin is maintained.

Eg: As Edelweiss Broking Limtied (EBL) provides funding for the shares bought by you, you need to
pay only part of total value of shares bought. E.g. If you buy Infosys shares worth Rs.1,00,000/-, you
are required to pay 25%* i.e.Rs.25000/- and balance Rs.75000/- will be funded by EBL on behalf of
you at the time of pay-in. This 25% can also be in the form of stocks collateral.
* % of the Margin may vary from time to time.

4. Do I need to open two Demat accounts to avail Margin Trading Facility?

No.

5. What if value of stocks under collateral for margin trading appreciated due to market
movement?
Your margin from collateral stock will get increased and you can use the same to create further
positions under Margin Trading Facility.

6. What if my stocks bought under Margin Trading Facility get appreciated? Will I get
additional margin on it?
No. You will not get any benefit in the form of margin for any appreciation of stocks bought under
margin trading.

7. What if I receive dividend on collateral stocks?

Dividend will be credited to your linked bank account.

8. What will be the interest calculation?

Interest will be charged on the total debit amount in your trading account. In case if you have
sufficient credit under normal segment to cover margin trading debit, no interest will be charged to
you.

9. For whom is Margin Trading Facility available?

This facility is available for all clients of Edelweiss Broking Limited. Except clients availing existing
Loan against Shares (LAS) MTF facility, Employees of Edelweiss and Dormant clients.

10. What is the rate of interest being charged for using Margin Trading Facility?
As applicable in your trading account.

11. What are the margin requirements, while trading under Margin Trading Facility?
It varies for scrips. The list of scrips along with Margin Requirements is available in CIP and
Edelweiss.in.
CIP: Login >> Risk Reports >> Reports >> GRG Haircut >> SMTF Approved list
 Edelweiss.in: Login >>Buy/Sell >> Margin Files >> MTF stock List

12. What will happen if I do not maintain sufficient margin?

You will not be allowed to buy any securities under Margin Trading Facility.

13. What will happen if a client does not maintain minimum required margin for Margin
Trading Facility?
If the minimum margin is not maintained for 5 consecutive trading days, the MTF product will get
blocked and the client will not be able to initiate any new positions in the MTF product. Going
forward, EBL will make a Margin Call and the position can be liquidated.

14. What if I am not able to meet the Margin Call?

 Edelweiss Broking Limited will go ahead and liquidate the securities if you fail to meet the
margin call made or if you fail to transfer funds. Margin call/ liquidation can be made at any
point of time when margins are not in place.
 Liquidation will be enforced on margin shortfall exceeding T+5 days.
 Liquidation will be done to clear shortfall. If shortfall is of 25k and stock available for
liquidation is having haircut of 25% then liquidation will be done for 1 lac value.
 Advance notification will be given before introduction of Liquidation in MTF.

15. How can I check my Margin Trading positions?

o Margin Trading positions taken today can be seen under Positions for Equity.
o Margin Trading positions taken before today are a part of your holdings available under
holdings page.
o For specific Margin Trading reports, please visit our reports section on Edelweiss.in >> More
Reports >> Holdings Reports

16. How can I take Margin Trading positions? / How can I place an order in the Margin
Trading Product?
While placing the order, select product type as 'Margin Trading - MTF' in Edelweiss.in, Trader’s
Lounge and Edelweiss Mobile Trader. For Xtreme Trader, select the product type as ‘MTF’.

17. Is Short-Selling allowed in Margin Trading Facility?

No, Short – Selling is not allowed in Margin Trading Facility.

18. How long can I carry forward the debit/ outstanding amount in my account?
o Debits can be carried forward, till the time customer is able to maintain the minimum
margin required for the margin funding position. In case if the value starts depreciating, you
will have to transfer the funds to remain above minimum maintenance margin, else
Edelweiss Broking Limited can liquidate the position, held by you to cover the required
shortfall % (if any).
o Other condition is that your trading account remains active in 90 days (at least 1 trade in
every 90 days)
19. Can I sell 100% shares on the next day, bought on previous day under Margin Trading
Facility?
o Yes. You can sell 100% shares the next day, of the stock bought on the previous day. Go to
Holdings >> Select the stock bought yesterday and Sell.
o Product Type needs to be Delivery (ÇNC) to sell stocks bought prior to today.
o Product Type needs to be Margin Trading (MTF) to sell stocks bought today.

20. What are the brokerage charges for buying/ selling using Margin Trading Facility?
There are no separate brokerage charges. Charges remain same as applicable to you currently.
However, please note that for MTF separate contract notes are provided. Delivery brokerage rates
apply even in case if intraday trading is done in case where the position gets shifted from MTF to
Non-MTF or Non-MTF to MTF.

Let us understand with the help of an example:

If you wish to do intraday, buying and selling needs to be done in same product type.

Holdings need to be checked prior to selling the stock and buying it back again on the same day to
avoid delivery brokerage being charged. If the stock is held in MTF, and selling is done in CNC then if
buying it back than the same needs to be done in MTF only.

21. Can I trade in Derivatives, even if I am registered for Margin Trading Facility?
Yes. If you have opted for Derivative segment, you can trade in derivatives segment. Derivatives and
Margin Trading are separate products/segments and require separate consent to be activated in
your trading account. If both are already activated, you can trade in both.

22. Can I use Margin Trading Facility for Derivatives trading?

No. Margin Trading facility is available only for Cash segment.

23. Can I provide stocks as security for availing limits for trading under Margin Trading
Facility?
Yes. Limits is given against your stocks as collateral limits and you can use this limits for Margin
Trading.
24. Will my limits be released after the square off transaction, and can I use it further to
take fresh position?
As soon as you square off the position, your limits would be released and further fresh positions can
be created.

25. Do I need to pledge stocks as collateral for availing limits as collateral for margin
trading?
No. Eligible stocks are automatically considered as collateral for availing limits.

26. Can I sell the margin trading positions on the same day?
Yes you can. Margin Trading positions taken today can be seen under Positions for Equity and can be
squared-off from there.

27. Can I convert my Margin Trading positions to Intraday/Delivery/NRML?

Yes – Only on the day when the Margin Trading position is initiated. You can convert the Margin
Trading position on the day of initiating the position subject to margin availability for the product
you wish to convert.

28. How to square-off/exit margin Trading positions?

Visit the Holdings section on any of the platforms, Sell the scrip that you wish to square-off.

29. How many scrips are allowed for Margin Trading facility?
Over 1000 scrips are allowed for Margin Trading facility. Refer to scrip list at:
CIP: Login >> Risk Reports >> Reports >> GRG Haircut >> SMTF Approved list
Edelweiss.in: Login >>Buy/Sell >> Margin Files >> MTF stock List

30. Will I get a separate contract note for the Margin Trading Facility?
Yes. A separate contract note is provided for Margin Trading facility.

31. Where can I get Margin Trading reports?

o Margin Trading positions taken today can be seen under Positions for Equity.
o Margin Trading positions taken before today are a part of your holdings available under
holdings page.
o For specific Margin Trading reports, Visit Reports section on Edelweiss.in >> More Reports
>> Holding Reports

32. Why there is separate ledger for Margin trading?

This is required and mandatory as per SEBI regulations.
Available under CIP >> Client Info >> Reports >> Datewise Ledger >> Type MTF
Available under Edelweiss.in >> Reports >> Ledger

33. Why there is separate contract note for Margin Trading?

This is required and mandatory as per SEBI regulations.
 34. How to sell in Margin Trading product?
o To sell scrips bought in Margin Trading product today, select product type as “Margin
Trading” at the time of selling.
o To sell scrips bought in Margin Trading product earlier (not today), select product type as
“Delivery (CNC)” at the time of selling.

35. How is Margin Trading product different from T+5 (NRML)?

In NRML product, positions get liquidated after T+7 days or all segments get blocked from further
trading after T+7 days whereas in Margin Trading there is no liquidation or blocking. Minimum
margin requirements are necessary in both cases to avoid liquidation.

36. Will all NRML (T+5) positions be converted to Margin Trading when I give consent for
Margin Trading automatically?
No. To shift your positions to Margin Trading, NRML positions are required to be squared off and
fresh positions are required to be created in Margin Trading. There is no automatic conversion.

37. I am trying to sell in Margin Trading but my order is getting rejected even when I am
having holdings in my account. Why? What should I do?
To Sell Margin Trading (MTF) holdings, Delivery (CNC) product type needs to be selected.
To sell Margin Trading (MTF) positions bought today, you need to select product type as Margin
Trading (MTF).

38. Is Margin Trading available in both – NSE and BSE exchange?

Margin Trading facility is available only in NSE exchange as of now.

39. I have bought stocks in Margin Trading in NSE, can I sell them on BSE?
No. Stocks bought in Margin Trading in NSE, should be should in NSE exchange only.

40. I have a debit in my account in Margin Trading (MTF), will my Margin Trading get
blocked or stocks get liquidated?
Margin Trading in your account will not get blocked till the time you maintain minimum margin as
per requirements. If minimum margin is not maintained and if there is a shortfall in your account for
5 days, then Margin Trading will be blocked in your account.

41. Where can I check my client’s Margin Trading Ageing and Shortfall report?
Margin Trading Ageing and Shortfall report is available in CIP.
Login to CIP and Visit T+5 ageing Report >> Click on Masters >> Click on Consolidated Ageing &
Liquidation Report.
In this report, if the MTF Shortfall is “Y” than there is shortfall in client’s account.

Day wise shortfall details are available under columns as MTF Shortfall T-1, MTF Shortfall T-2, MTF
Shortfall T-3, MTF Shortfall T-4, MTF Shortfall T-5.
 The shortfall as mentioned in the “MTF Total Shortfall” column needs to be cleared to avoid
blocking and liquidation.

Blocking and Liquidation of MTF holdings will happen to the extent of shortfall amount, if there is
shortfall for a continuous period of 5 trading days.

42. What brokerage is applied when I sell shares in CNC (Delivery) and Buy in MTF (Margin
Trading) for the same company, same quantity and on same day?
Delivery brokerage rate is applied in this case.

43. How do I know if Margin Trading is enabled for my client’s account if he has already
given consent for it?
Margin trading product activation status can be checked in CIP:
Login to CIP >> Search for client >> Click on Platform & Segment >> Check MTF activation

44. In offline mode, where do I place payout request for MTF clients?
Payout for MTF clients need to be placed in APO module.

45. Where can I see the breakup of the interest charged in MTF?
Interest break up is available in CIP.

Follow path:

CIP: Login to CIP >> Search client >> Client Info >> Volume and Brokerage >> SMTF Delay Payment
Charges “Details” link

Edelweiss.in: My Reports >> Charges >> Delayed Payment Interest >> MTF.
46. Client’s MTF account is showing shortfall/blocked despite sufficient margins being
available?
This can happen for any of the 3 reasons:

1. If the margins available are not approved for MTF (In some cases of Mutual
Funds/NCDs/Non-group 1 stocks)
2. Non-MTF Holdings are sold during T day and T-2 days. Selling of non-MTF holdings offers
notional credit for T+2 days which can be used for transacting in non-MTF segment.
However this notional credit is not considered against MTF margin shortfall. This credit can
get adjusted only on T+2 days and hence unblocking of MTF account can happen only on T+2
days.
3. Stocks sold in MTF on T-1/T-2 days with expectation of clearing shortfall and unblocking of
account but account still remains blocked. This happens when the value of the stocks sold
does not clears the shortfall amount.
a. Eg: Shortfall in account = 1 Lac.

Stocks sold value in MTF (with expectation to clear shortfall) = 1 Lac

Haircut on the stock sold = 25%

Margin released as a result of stock sold = 25K.

Here, since the stocks were bought on leverage in MTF only the margin amount was
blocked and hence at the time of selling only the margin amount will get released.

So in order to clear the shortfall of 1 Lac, stocks that need to be sold to clear
shortfall should be of 1 Lac value post haircut. i.e., Sell stocks worth 4 Lacs with
which 1 Lac margin will be released to clear the shortfall.

Stocks bought under MTF product lie in MTF hold account - These stocks cannot be used as collateral
or as margin for MTF or FNO or any other segment.

A detailed bifurcation of stocks is available in Edelweiss.in >> My Reports >> Account Overview >>
Holdings Report >> All Holdings

You can get to see here, which stock is lying in Demat, in collateral, in MTF hold, in MTF collateral
etc.

If the stock is in MTF hold - The stock is bought in MTF and cannot be used as margin.

If the stock is in MTF collateral - the stock is already used as margin for MTF product.

If the stock is in DP/Demat - the stock is free and not used anywhere. This can be if there is no
margin requirement or it is non-group 1 stock and cannot be used as margin.

If the stock is in Collateral - the stock is used as collateral for normal segment against cash or fno
margin requirement.
47. Where can I see the list of eligible scrips in MTF?
CIP: Login to CIP >> Risk Management >> Reports >> GRG Haircut >> SMTF List

Edelweiss.in: Login to Edelweiss.in >> Click on Buy/Sell >> Click on Margin Files >> Click on MTF stock
list.

48. I bought stocks in MTF but the stocks are now reflecting in NRML?
If MTF ledger is in debit and normal ledger is in credit, then funds are transferred from normal ledger
to MTF ledger to the extent to credit available. At the same time, the stocks get released from MTF
to NRML to the extent of debit getting reduced in MTF. If there is no funding requirement in MTF,
the stocks get released to NRML.

51. Can I activate MTF on exception basis urgently?

No. Refer point 2 mentioned above.
49. NRML is blocked, Can I buy in MTF?
Yes, if NRML is blocked, you can buy in MTF.

*if there is no shortfall in MTF account for 5 consecutive days.

50. Where can I see MTF and NRML Holdings?

CIP: Visit CIP >> Search Client >> Assets >> “Summary” Dropdown
Edelweiss.in: Login >> Reports section on Edelweiss.in >> More Reports >> Holdings Reports
EMT: Login >> Right side Menu >> Portfolio & Reports >> Top Dropdown select “Holdings” >> Click
on any holdings to see bifurcation of NRML and MTF holdings.

51. Can I transfer funds directly to MTF?

Yes. Funds can be transferred directly to MTF account. Any funds transferred by way of cheque or
payment gateway by selecting the ledger type as “SMTF” or “Margin Trading”. This facility is not
available for e-collect. In case if excess funds are available in normal ledger that those would be
moved to SMTF ledger.

52. When will the cheque receipt be considered in MTF ledger?

Cheque amount will be considered in MTF only when the cheque gets cleared and funds are
transferred to Edelweiss. In case, if the client is having debit on T day in MTF ledger and zero balance
in normal ledger and he deposits a cheque with Edelweiss on T day, then the cheque amount will get
added in his SMTF ledger only when the cheque gets cleared. In such cases, interest will get levied to
client’s SMTF ledger till the clearance of cheque.

53. What are the different types of Liquidations in MTF?

1) T5 Shortfall Liquidation – If there is 5 days of continuous shortfall in client’s account, then
liquidation of upto shortfall amount will be done in clients account to clear the shortfall.

2) T320 Liquidation – Maximum time allowed to keep debit in SMTF ledger is for a continuous period
not exceeding 320 days. Thus, if there is debit in client’s account for a continuous period of 319 days,
then liquidation will be done in client’s account upto the debit amount.

This report is available under CIP >> T5 Ageing Reports >> Masters >> SMTF T320 Report

3) Unapproved scrips liquidation – If any scrips which was approved earlier but moved out of
approved list or any scrip that is unapproved as a result of corporate action will be liquidated under
SMTF on T+6th day of movement out of approved list/corporate action.
54. I hold stocks in SMTF, will I be eligible for buyback/rights issue?
No. Stocks need to be in demat account for buyback eligibility on the record date of the buyback and
rights issue.

Stocks bought in SMTF are kept under SMTF hold account and these stocks get moved to demat
account only when the funding is cleared for these stocks. I.e., when SMTF debit gets cleared by
payin of funds, the stocks get moved to demat account.

You need to ensure that funds transfer is done to SMTF ledger (for stock movement to DP) atleast 2
trading days prior to the record date.

If you are eligible for buyback, the stocks need to be in your demat account even at time of
tendering the shares during the tender offer.

55. Which stocks and how much to liquidate to clear SMTF Shortfall?
Liquidation amount depends upon the haircut of the stocks you liquidate to clear the shortfall.

Eg:

1) If you have shortfall of 10000 Rs, you will need to liquidate stocks worth 10000 rs if the stock
is having 100% haircut.
2) If you have shortfall of 10000 Rs, you will need to liquidate stocks worth 20000 rs if the stock
is having 50% haircut.
3) If you have shortfall of 10000 Rs, you will need to liquidate stocks worth 40000 rs if the stock
is having 25% haircut.

Visit SMTF Liquidation Calculator in CIP at CIP >> Assets >> Summary >> Liquidation Calculator to
understand exact liquidation value and the stocks to liquidate.

56. What is SMTF T320 liquidation?

As per the liquidation policy for SEBI MTF, SMTF ageing debit needs to be cleared every 320 days by
the client.

Continuous debit in SMTF ledger is allowed only for a period of 320 days. Any debit beyond 320 days
will be liquidated on 321st day.

57. Where to check which clients are coming under SMTF T320 liquidation?
CIP >> Reports >> T+5 Ageing Report >> Masters >> SMTF T320 Liquidation Report.
58. How to avoid SMTF T320 liquidation?
SMTF debit can be cleared by:

1) Transferring funds
2) upto SMTF debit amount in SMTF ledger using payment gateway or cheque.

3) Shifting stocks from MTF to NRML upto debit amount

This can be done by selling MTF stocks and buying them in NRML. This can be done only if
the client is not blocked under T+5.

4) Selling MTF stocks upto debit amount.

Client can sell MTF stocks upto the MTF ageing debit amount. Please ensure that only MTF
stocks are sold and not NRML stocks.
In case if NRML stocks are sold then NRML debit will get adjusted first. In this case, the client
will have to clear combined debit amount of Normal and SMTF before 318 days as excess
normal sell credit can be adjusted against SMTF debit only on settlement.
Prior to selling: Ensure you sell on MTF stocks. To check the bifurcation of MTF stocks/NRML
stocks, visit CIP >> Search client >> Assets >> Summary (dropdown).
Once the MTF debit is cleared, the clients can buy the stocks again on the next trading day.

59. Will clients coming under SMTF T320 liquidation be blocked for trading?
Clients coming under SMTF T320 liquidation will be blocked from initiating fresh positions in MTF
product on the liquidation day. Unblocking will be done on the next trading day only when the SMTF
T320 debit gets cleared.

60. Can we raise exceptions for clients coming under SMTF T320 liquidation?
There will be no exceptions in SMTF liquidation.

ESOP Clients:

1) Since ESOP clients come under their company’s compliance policies like Black-out period,
selling restrictions etc. It is advisable that these clients do not initiate any fresh positions in
MTF as there will be no exceptions for ESOP clients to avoid liquidation.
2) Going forward, we are going to block MTF product for ESOP clients (for all clients under RMS
category of ESOPs).
61. What is MTF shortfall?
To buy any stock in MTF product, you need margin in your account.

The margin varies from stock to stock and is based on the haircut of the stock.

The margin can be in the form of cash or collateral.

Eg: To buy 1 lac worth of reliance, you need margin of 25% i.e, 25000 Rs since the haircut of reliance
is 25%.

Now say you had 25000 Rs value of stocks post haircut in your account. Your collateral limit is 25000.

Based on this limit, you bought Reliance worth 1 lac under MTF product.

Now say if the value of Reliance that you bought falls to 99000 Rs as the Reliance falls 1% after you
bought - This 1000 Rs decrease in value is MTF shortfall.

Shortfall need not be only due to fall in the value of MTF stocks purchased.

It can also be due to fall in value of the collateral.

Eg: To buy 1 lac worth of reliance, you need margin of 25% i.e, 25000 Rs since the haircut of reliance
is 25%.

Now say you had 25000 Rs value of stocks post haircut in your account. Your collateral limit is 25000.

Based on this limit, you bought Reliance worth 1 lac under MTF product.

Now say if the post collateral value of the stock in your account falls to Rs 24000, This leads to a MTF
shortfall of 1000 Rs.

The value of your collateral can fall due to:

1) Fall in price of the stock under collateral

2) Increase in haircut of the stock under collateral.

Thus, the difference in margin available and margin requirement for stocks bought in MTF is called
as MTF shortfall.

61. How to deactivate SMTF?

Visit CIP 2 >> Search Client >> Client Overview >> Platforms & Segments >> Consent & Mandate >>
Click on “Deactivate”.

Conditions to deactivate SMTF:

1) There should not be any holdings in SMTF product

2) SMTF ledger balance should be 0

SMTF will be deactivated within 2 trading days.