What is Buyback of shares?

Share or stock buyback is the practice where companies decide to purchase their own share from their existing shareholders either through a tender offer or through an open market.

How do companies buy back their shares from share holders?

Companies buy back their shares by two methods, either by the Open Market or through Tender offer.

Open Market offer: Companies can buyback their shares directly from open market by the sellers. This buyback can last for months as disclosed by the company to the SEBI.

Tender Market offer: Companies offer a buy back of its shares at a particular price at which investors can apply. The tender market buybacks can be applied through stock broker’s platforms.

What is the Process to tender Buyback of shares through ProStocks web application for POA clients?

ProStocks offer buyback of shares through its trading application.

Margin Pledge and Repledge (MPR) is a process that allows you to use your Demat holdings as collateral to obtain trading margins from ProStocks. Here’s how it works:

1. Pledging Securities:

   When you want to trade with ProStocks, you need to maintain margins for your trades. These margins can be in the form of cash or stocks.

   In the traditional system, when a client wants to pledge their stocks to obtain margins, they transfer the securities from their Demat account to the broker’s account. The broker then pledges these securities to the Clearing Corporation.

   However, this transfer of title (ownership) of the securities leaves room for potential misuse by certain brokers.

2. The New Pledge System:

   To address this issue, a new pledge system was introduced, which went live from August 1, 2020.

   In this new system, the stocks do not leave the investor’s Demat account. Instead, a pledge is marked in favor of the broker.

   The broker is required to open a separate Demat account labeled ‘TMCM – Client Securities Margin Pledge Account’ for this purpose (TMCM stands for Trading Member Clearing Member).

   The broker then re-pledges these securities in favor of the Clearing Corporation and obtains margins.

3. Benefits of the New Pledge System:

   No Misuse of Securities: Since the stocks remain in the investor’s account, there is less chance of misuse of securities. It also prevents the possibility of pledging one client’s stocks to offer margin to a different client.

   Corporate Actions: In the new pledge system, the client receives all cash and non-cash corporate actions (such as dividends, bonus, rights, etc.) because the stocks are held in the client’s collateral account. 

4. What is the process of margin pledge and re-pledge through Mobile back office App?

   Step 1: Request your broker to pledge a specific number of securities 

   1. Go to Mobile back office Click on Stock Movement tab.
      
   2. A new tab in Stock Movement will open than click on Pledge Stock.
      
   3. The List of the holdings will get displayed, mention the Pledge Qty in the tab and click on Save button on top.
      
   4. A Pop up will be displayed to save the data where we need to click on YES and request will be submitted.
      

   Step 2: Once your pledge request is submitted by ProStocks to Depository system, as mentioned above, the depository (CDSL in case of ProStocks) will send you a link to your registered mobile/email id. Alternatively, You may use the below given link also. https://www.cdslindia.com/Authentication/OTP.aspx?id=O

   Step 3: Visit the link you have received on your registered mail ID or mobile number or you can use the link given above also directly

   Step 4: Once you click the link, the authentication process starts. The link will redirect you to the CDSL web page, where you are required to verify your PAN number or Demat account number.
   

   Step 5: After verifying the details, click on generate OTP to authorise the pledge 

   Step 6: You will receive an OTP on your registered mail ID and mobile number 

   Step 7: Enter the OTP to authenticate your request on the CDSL platform. You will receive a confirmation message for your pledging margin request, and the pledge request will take a couple of hours to be activated 

   Note: Note: NRI client will receive OTP on email and SMS on Indian mobile number, if provided. CDSL Depository does not send SMS on international number. 

Please note that the new pledge/re-pledge mechanism enhances investor safety by minimizing the risk of securities misuse and ensuring transparency in the process. If you have any more questions or need further clarification, feel free to ask us!

Step 1: Request your broker to pledge a specific number of securities

1. Go to the Back-office under Demat Stock Click on POA Margin Pledge Request.
   
2. A window with your holdings quantity will open , mention the quantity and click on save.
   
3. Once you click on save button record save successfully will display.
   
4. ProStocks team take data every two hours between 10 am to 4 pm from Monday to Friday and upload the request in CDSL Depository system.

Step 2: Once your pledge request is submitted by ProStocks to Depository system, as mentioned above, the depository (CDSL in case of ProStocks) will send you a link to your registered mobile/email id . Alternatively , You may use the below given link also. https://www.cdslindia.com/Authentication/OTP.aspx?id=O

Step 3: Visit the link you have received on your registered mail ID or mobile number or you can use the link given above also directly

Step 4: Once you click the link, the authentication process starts. The link will redirect you to the CDSL web page, where you are required to verify your PAN number or Demat account number

Step 5: After verifying the details, click on generate OTP to authorise the pledge

Step 6: You will receive an OTP on your registered mail ID and mobile number

Step 7: Enter the OTP to authenticate your request on the CDSL platform. You will receive a confirmation message for your pledging margin request, and the pledge request will take a couple of hours to be activated

Note Note: NRI client will receive OTP on email and SMS on Indian mobile number, if provided. CDSL Depository does not send SMS on international number.

To add or amend nominee follow below steps.

Step 1 - If you are using Prostocks Star Web application then go to Status option available on your web dashboard. (Refer below screenshot)

OR

If you are using Prostocks Star Mobile application then go to Profile option and click on Add/Modify.

Step 2 – Then click on BO Modification.

Step 3 – After clicking on BO Modification you will get an option to Add or Amend Nominee click on that.

Step 4 – Next you’ll get a Nomination Form where you need to fill the details of your nominee. After filling all the details click on Generate PDF and then click on Generate Digitally Signed PDF.

Step 5 – After clicking on Generate Digitally Signed PDF you’ll get an option to send authentication code on your registered mobile number. First confirm your mobile number and then click on Send code to Mobile. You’ll get 5 digits security code on your registered mobile number, once you submit the code, you’ll get an option to Sign Now click on that it will take you to the NSDL E-sign page.

Step 6 – In last step you need to do E-sign using your Aadhar Number and OTP to complete the process.

Step 7 – After completing E-sign please send digitally signed PDF on [email protected]. Mention “Request for Nominee Addition” in subject with your Client Code.