Stock Market: Deduction On Delivery Sell Transactions Explained

Suppose you’ve recently sold stock from your portfolio. In that case, you know that under SEBI’s Peak Margin guidelines, you only receive 80% of the total stock value in your fund’s balance on the same day you sell a stock from your Demat holdings, with the remaining 20% becoming available the next day. Demat or stock assets that have completed their T+2 settlement cycle are included in this category.

Those stocks that haven’t finished their T+2 settlement cycle or haven’t yet been deposited to your Demat account? Similar to the Demat holdings, these so-called “T1” assets have benefited from the same 80% funds credit on delivery sell transactions.

Delivery Sell Transactions: What’s New

Selling shares purchased in the last two days (T1 holdings) will only get you 60% of the total stock value on the same day as January 28th, 2022. On the following day, you’ll be able to access your funds. You’ll get 80% of the total stock value on the trading date when you sell Demat holdings and the rest the following day.

Is it affecting you in any way?

Delivery sell transactions in the equity segment will be affected by this. So, on Monday, you buy Rs 10,000 worth of shares, which you then sell on either Tuesday or Wednesday. If you do this, your trading account will only have Rs 6,000 (60 percent of Rs 10,000). If you sold it on Tuesday, you’d have the remaining balance (Rs 4,000) accessible on Wednesday. If you sell it on Wednesday, it will be available on Thursday.

The next day, you would receive Rs 8,000 (or 80 percent of Rs 10,000) if you sell the shares by Thursday or later.

Fund Balance Delivery Sell

What Is The Cause Of This Shift?

Let’s take a closer look at how this new distinction between T1 and Demat holdings comes into play. Because of peak margin requirements, brokerage firms move the client’s deposited stock directly to the exchange. T1 holdings cannot be settled on the same day as Demat holdings because they are still en route from the exchange to the client’s Demat and are not yet available in the demat. To sustain the high margin needs resulting from these deals, brokerage houses are devising new strategies (if they haven’t already).

To help you identify T1 holdings in your portfolio, we are actively working on adding labels to the portfolio. A few weeks from now, it should be available for purchase. We’ll keep you apprised of any developments as soon as possible.

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  • Selling shares purchased during the previous two days (T1 holdings) will result in a credit balance of 60% of the entire sell value as of January 28th, 2022.
  • You will continue to receive a credit balance of 80% of the total sell value if you sell shares from your Demat holdings.

Note: Republished from PayTm Money Website.

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