1. What is Client unpaid Securities Account ( CUSA)
With respect to SEBI Circular No. CIR/HO/MIRSD/DOP/CIR/P/2019/75 dated June 20, 2019 on Handling of the clients Funds and Securities by Trading Members/ Clearing members ( TM /CM) which are available for your perusal.
Navia based on the above SEBI circular shall be required to transfer the client's securities received in pay-out (T+2) to client's demat account within one working day. But in case if the securities received in pay-out are not paid fully by the client , then Navia may retain those securities in "CLIENT UNPAID SECURITIES ACCOUNT (CUSA)" and these securities will be transferred to the client’s respective demat account upon the fulfillment of funds obligation in the account. Further if at any time if the client fails to meet the funds pay-in obligation within four trading days (4) from pay-out day(T+2) then Navia shall liquidate the securities in the market to recover the debits/dues in the account including the penalty/interest/ Dp charges/ any delayed payment charges etc..
2. What is the status of the CUSA account shares, if the debit is not cleared by the client on 4th day from the payout day?
Navia shall liquidate these securities in the CUSA account based on various parameters including but not limited to liquidity, volatility, categorization, concentration, or any single stock or set of stocks that has value close to the amount outstanding, or based on any corporate action that is getting triggered in the stocks held or events that could trigger price fluctuation in any particular sector or a particular company. Navia may in its sole discretion, determine the time of sell and securities to be disposed off ( Not FIFO Method) and or which open position is / are to be liquidated / closed. Further Navia shall not take any pre-order confirmation /margin calls prior to the liquidation of the securities and Navia shall not be held liable for any loss that arise due to the liquidation of securities.
Navia shall not allow the client to initiate any buy trade immediately after the liquidation of the securities due to debit balances in the client account on 4th day. It is because further exposure is disallowed as the old debit is not realized and it will be allowed only on the realization of the debits in the account. Further, Navia at its discretion ought to liquidate the securities, if any taken immediately after the liquidation of the unpaid securities on 4th day and shall not be held liable for any loss out of this liquidation.
The SEBI circular on Handling the client securities unpaid account and Exchange FAQ is attached.