In accordance with the latest regulatory updates on Credit for Sale, we have introduced modifications to our Risk Policy. As you might be aware that Credit For Sale benefit can now only be provided after doing the early pay-in of securities
To ensure a seamless transition, these changes will be implemented gradually over time.
Case
Selling of Stock
Current
Revised
Phase
(a)
From Free Holding
80%
80%
Phase 2
(b)
CUSA
80%
0%
Phase 2
(c)
BTST
80%
0%
Phase 2
(d)
Margin Pledge
80%
80% or (100% less Haircut value whichever is minimum)
Phase 1
Consider the below examples for better understanding:
(a) If you sell stock from Free Holding - You will get flat 80% of the CFS benefit
(b) If CUSA stock is sold / You sell stock from CUSA - You will get no CFS benefit
(c) If you buy the stock and sell on the next day (BTST) - You will get no CFS benefit
(d) If you sell stock which is Pledged for Margin - You will get a minimum of 80% or (100% less the haircut value of the stock).
Stock Name
Haircut
CFS Benefit
Stock A
10%
Min (80%, 90%) = 80%
Stock B
15%
Min (80%, 85%) = 80%
Stock C
35%
Min (80%, 65%) = 65%
We will be rolling out Phase 1 (Case: d) from 10th August, 2023 and we will update the date of implementation of Phase 2 (Cases: a, b, and c).
Update: Phase 2 will be rolled out from 18th September 2023.
(a) If you sell stock from Free Holding - You will get flat 80% of the CFS benefit
(b) If CUSA stock is sold / You sell stock from CUSA - You will get no CFS benefit
(c) If you buy the stock and sell on the next day (BTST) - You will get no CFS benefit
@Rajesh@PravinJ@Poornima Is buyback of holdings now possible? From the main post, one gets the idea that this is a regulatory change but if it is a black and white regulatory change then it applies to all stock brokers in India and no one would be allowing buyback of sold holdings but that is clearly not the case as buyback is allowed at the largest stock broker and no one there is running into any margin shortages. Converting position to intraday and then buying back may be a temporary workaround but not a solution as itâs not feasible, not scalable and not convenient.
So what is the real reason behind Dhan not allowing to buy back sold holdings? Even in the linked NSE circular, no where does the circular says that sold securities cannot be bought the same day.
We refer to the circular above and make changes to the processes, it clearly states that when Securities are sold from holdings, we can pass 80% limit after early pay-in of those sold shares. Canât comment on what other brokers do. Alternative for doing buyback is to convert the order to Intraday, this solves for the same.
Dhan, this is deal breaker for swing traders. Zerodha, Mstock, etc. brokers allow delivery square off whereas dhan is using regulatory excuse to deny its customer the intraday profit then can get after selling their holdings.
That is k. But if clients have sufficient fund they should be allowed to buy back what they sold without going for intraday product. There is no regulatory hurdle in allowing the client to buy back what was sold the same day if he has sufficient funds left in the account.
Whatâs more laughable is that Dhan is losing brokerage and they are not aware of it.
Dhan team, how many delivery trade do you block every month because of this policy and lose brokerage, could you calculate loss of revenue caused by this?
Just multiply no. of delivery trades which end up in price fall with Rs. 20/- missing brokerage.
Stupid policy is being defended as smart move. You are losing brokerage because of this. period.
Dhan is not giving 80% margin credit for BTST sell on next day. There are no such regulatory or exchange rules for this. When i asked Dhan Customer care, they said we do not give 80% margin credit on next day. Every broker allows this but donât know why dhan is not allowing it.
Clearly Dhan is not good for traders.
Hi @RAJANSINGHAL This is against the exchange norms⌠as a platform Dhan does early pay-in of securities once they are sold, which means your sold securities are transferred to the Clearing Corporation on your behalf, for which we give you 80% margin benefit.
In case of BTST - we do not have your securities with this, so if we cannot to a pay-in of securities because they are not delivered to us - we wonât be able to offer any margin on same. Hope this clarifies.
We cannot comment on why any particular broker will do this, as it is an risk to business and also leads to penalties that will be eventually passed to the user and again violation of the norms.
I saw an opportunity and sold my holding stock (Not BTST, old holdings) at 3:21 PM, but unfortunately, I was unable to buy it back before 3:30 PM, resulting in a loss of my holding stock. The RMS blockersâ rules are really frustrating. I havenât faced this issue with other reputed brokersâwhy only with Dhan?
Managing MIS/CNC is just type of order usually use for square off. Even though I had a sufficient balance, I was still unable to buy again. This is really ridiculous. This is the only reason I donât fully relying on Dhan. Additionally, I am surprised that even after a year of raising this thread, still havenât received a satisfactory resolution.
As end customers, we donât need to understand how your system works internally. We just need solutions, similar to those provided by other brokers. What ultimately matters is seizing opportunities, and this is not something we can compromise on.
In your case 2, I am unable to understand how can one repurchase 100 shares of Reliance without adding further margin since 80% margin (now 100% due to recent NSE circular) against sale of 100 Reliance shares would be used against fresh position in another stock or F&O.
It therefore looks like technical integration issue with Dhan.