I received an Intimation for margin shortfall penalty. What should I do?

As per SEBI regulations, Margin shortfall penalty is applied to positions with insufficient margins. Accordingly, you are required to ensure that all types of margins viz. SPAN, EXPOSURE, VAR/ELM, DELIVERY MARGIN, and MTM Margin are adequately available in your m.stock account always. 

Margin shortfall can happen due to several reasons such as the increase in volatility, price fluctuation, increase in margin requirement by exchanges, mark-to-market (MTM) losses or squaring hedge position, etc. Under these situations, the penalty is applied if the margin requirements are not met. 

You need to ensure that a sufficient margin is always maintained against the open positions/trade. In case of any margin shortfall, the Risk Management team will square off the position on a best-effort basis. 

Margins can be monitored on a real-time basis on m.Stock mobile app and web trading platform under 'Reports' > 'Funds Summary' and appropriate, timely action can be taken to avoid position square-off from the RMS team. 

Further, if MTM loss (including full net option premium) reaches 75% of the available margin, the position will be automatically squared off. 

The penalty levied in case of a shortfall in the margin for F&O positions or equity trades: 

Short collection for each client Penalty percentage 

(< Rs 1 lakh) And (< 10% of applicable margin) 0.5% (= Rs 1 lakh) Or (= 10% of applicable margin) 1.0%