So an FD is created using client funds and pledge with clearing corporation. This way brokers earn float and all the funds overnight sits with clearing house.
Basically there is no risk of funds misuse. After new upstreaming rules. Brokers should do payout same day as they can’t keep idle funds. Is system changes made
Can u tell this…sebi started new upstreaming rule to be followed in July 1st.
SEBI had issued this circular ^ in which it was stipulated that unpaid securities be pledged to the Client Unpaid Securities Pledge Account (CUSPA) for 5 days, and if the client doesn’t bring in the funds, the securities be disposed off to recover debit. Manu seems to be referring to the provisions of this specific circular.
However, I don’t think the intent of this circular is to offer T+5 funding
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Yes…it’s this. I think it’s loophole. I pledge my shares to get margin. I buy shares and within t+4 days I send money to meet the margin.
What I understand is its an regulatory loophole. As only var margin to be collected and then brokers should report client shortages on t+5 days. So brokers give time till t+5.
I’m i correct for this.
You’re right. As I’ve said earlier, I don’t think it’s regulatory intent to offer T+5 funding using this route. We will not be able to provide such a facility at Zerodha for now.
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I’m only waiting for MTF. I buy short term in zerodha and long term in other broker to segregation of shares for long term capital gains due to fifo.
Also
I buy reliance share for rs1000 say 10 shares to keep for long term like years and years
Then there is sudden short term opportunity in reliance at price rs1500. After rs1500 rose to rs1750. I sell it, due to fifo. Rs1000 will be sold now. So long term capital gains will be calculated from rs1500 when I sell reliance say 5 years later.
I can buy pase fifo by having two demat account. This is regulatory loophole right and income tax loophole
This is not regulatory loophole. That was the intent.
FIFO system was introduced, because there is no way to say which shares you sold, unlike physical certificates. So, they needed to sort this issue of which shares are sold. They introduced FIFO because of this reason because there is no better way.
In two different demat, this issue doesn’t arise, so that is perfectly fine. If they wanted, they could have made FIFO global instead of per demat, but they didn’t purposefully, for obvious reason.
I sometimes sort this issue of capital gain by transferring longterm shares to different demat account, then sell, then bring back old shares. That way you can sell later bought shares. Completely okay according to IT circular.
kindly link the source/circular
Read this thread —
it contains circular too.
thanks. How come they’ve not updated anything in that thread? Z team seems to have been tagged in it.