Regulatory Penalties for Non-Compliance:

Regulators impose penalties for non-compliance with trading regulations. Below is an overview of common penalties and the scenarios in which they apply:

1. Margin Shortfall Penalty:

• Cause: Insufficient margin for F&O positions or equity trades.

• Penalties:

  • < Rs 1 lakh or < 10% of margin: 0.50%
  • = Rs 1 lakh or >= 10% of margin: 1.00%

• Repeated Shortfalls:

  • More than 3 consecutive days: 5% penalty per instance.
  • More than 5 instances in a month: 5% penalty per instance.
  • MCX Specific: After 3 shortfalls in a month, a 5% penalty is applied from the 4th instance onwards.

• GST:18% on the penalty amount.

• Reporting:
  Penalties are posted on T+6 day.

2. Trade Code Modifications:

• Cause:Modifications in client codes.

• Penalties:

  • < 5% modifications: 1% of trade value.
  • = 5% modifications: 2% of trade value.

3. Auction Penalties:

• Cause:Short delivery when selling shares not present in your Demat Account.

• Scenarios:

  • BTST (Buy Today Sell Tomorrow): Occurs when the shares bought the previous day are not delivered.
  • Selling with NRML Margin: Failing to buy back the shares before market close.

• Penalties:

  • T+1 Day: 150% of the sale value is blocked, and a provisional debit of 150% of the sale value is applied.
  • T+2 Day: Actual auction obligation is debited, and a 1% auction penalty is applied.

• Auction Obligation Calculation:
  The lowest auction price within a 20% range of the T+1 closing price is used for calculation.

Note: Exercise due diligence in trading to avoid these penalties. For detailed scenarios and rates, refer to NSE and MCX resources.