When available margin at the end of the day becomes less than margin obligation on carry forward position in Currency and Equity Derivatives segment is called reporting margin shortfall. ProStocks is required to report exchanges on daily basis minimum available margin and margin shortfall if any. Penalty on shortfall amount is levied by the exchanges based on SEBI circular. This penalty increases when any client has three day margin shortfall in any calendar month and further increases for shortfall for 5 or more days. Margin shortfall is taken very seriously by the exchanges.
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Shortfall amount
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Penalty per day in %
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< Rs 1 Lac and <10% of applicable margin
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0.5% for first three days
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≥ Rs 1 Lac and ≥10% of applicable margin
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1% for first three days
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If the shortfall continues to 4th day
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5% per day from fourth day onwards
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If the shortfall is caused due to movement of 3% or more in nifty on any trading day then the shortage penalty will be charged only if shortfall continues to T+2 days
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Penalty for margin shortfall is different from delay payment charges. Delay payment charges are applicable on all debits whether result in margin shortfall or not.
