Understanding client margin report
As per exchange regulations, we send the daily margin statement to every client's registered email address. This daily margin statement is in the format prescribed by SEBI. The margin statement is sent with the intention of informing a client what his margin status is i.e the margin you require for a position and the margin you have. In short do you have excess or shortfall of margins ? and what free margins are available in his account in order to take new positions without incurring penalty or charges.
If you have been trading on all exchanges, you'll receive a combined daily margin statement. A margin statement for a particular exchange will have all the segments included, that is if you trade on NSE EQ (equity) and NSE F&O - NSE CDS (equity & currency derivatives), both the segments will be included in daily margin statement.
The client margin report is a mandatory report which needs to be sent to the client in addition to the contract note.
Below is an example of how a daily margin statement looks -
Segment: NSE-CM indicates NSE Cash Market Segment, NSE-F&O indicates NSE-Futures & Options Segment, BSE-CM indicates BSE - Cash Market Segment and NSE-CD indicates - NSE - Currency Derivative segment.
Trade Day: The client margin report will be sent on T (trade day).
Funds (A): This refers to the funds available in your ledger balance.
Total Upfront Margin (F) : Margin required for the positions taken on T Day or the position carry forwarded from previous day. This includes the total SPAN + exposure margin + option buy premium blocked for the positions you have taken if any.
F&O - Sum of SPAN Margin+Exposure Margin+Net buy premium
CDS - Sum of Initial Margin+Extreme Loss margin+Net buy premium
MTM (G) : Mark to Market Loss if any for the positions held on T Day is earmarked with the closing price of the day.
Total margin (H)- shows the complete amount blocked by the exchange for your position, segment wise.
Excess/Shortfall w.r.t requirement by exchange/NSCCL (I) - This column shows the value of 'Total margin available' minus the value of 'Total requirement'
Margin Status (balance with member/ due from client) (K)- This column shows you the total free balance that is available for taking new trades the next trading day (unencumbered balance). Negative value in Column K indicates shortfall in Margin.
Important points to be noted:
When you sell shares from your Depository account, you will receive the credit in your ledger for sale amount with value date of T+2 days. However the client margin report is sent for T day. Thus it is possible that your funds column (A) may be zero and the report may indicate that you have funds due payable to the broker which is the sum of margins on your positions. These dues will automatically be reversed once your shares are delivered and sale proceeds received on T+2.
Note - Brokers are supposed to maintain separate ledgers for every segment. But as an industry norm, in the margin statement, all pay ins will be posted to the 'NSE EQ' segment, however, debits will be posted in the respective segment ledger and shown accordingly in the margin statement.