Question 1

What is Margin Trade Funding (MTF) Facility?

Accepted Answer

This is a product to facilitate funding of delivery based investments.

Question 2

How does MTF benefit client?

Accepted Answer

Unlike traditional lenders, clients avoid extensive paperwork, frequent pledging/unpledging, constant fund transfers, forced square-offs on day 5, and account locks due to continuous debits.

Question 3

What are the disadvantages of MTF?

Accepted Answer

Higher margin requirements than regular accounts; only Group I approved securities eligible, though this covers 90%+ market volume.

Question 4

Which are the permissible securities under MTF?

Accepted Answer

Equity shares in demat form that are classified as Group I Security per SEBI guidelines. Lists are periodically reviewed and RWSPL reserves discretion to exclude shares.

Question 5

What is the Initial Margin Deposit?

Accepted Answer

Cheques, bank fixed deposits with liens, bank guarantees, or eligible equity shares in demat form.

Question 6

How will shares provided as collateral be valued?

Accepted Answer

Market value minus share-specific risk value (VAR, ELM multipliers, additional margins, SEBI/exchange requirements calculated in real-time).

Question 7

What are MTF account opening charges?

Accepted Answer

There is no account opening charge for MTF account.

Question 8

What trading charges are levied in MTF account?

Accepted Answer

There are no additional charges for MTF facility. Tariff charges opted by you in your normal account will also be applicable for all trades executed in MTF.

Question 9

Who can avail Margin Trading Facility?

Accepted Answer

Registered RWSPL clients who have provided Power of Attorney for demat accounts.

Question 10

How much time will it take to activate MTF facility?

Accepted Answer

Within few minutes using OTP system given in client web login, with RM assistance available.

Question 11

Can I continue my regular trading account after opening MTF?

Accepted Answer

Yes, you can continue to trade in your regular trading account (including F&O segment) with fully fungible limits.

Question 12

How do I punch orders for MTF account?

Accepted Answer

Select 'MTF' as product type in ODIN Diet or mobile app; provide instructions to RM when ordering by phone.

Question 13

Can I move trades during market hours between regular and MTF?

Accepted Answer

Yes, you can shift the trades from MTF to Normal trade and vice versa during trading hours with sufficient limits.

Question 14

Can I move trades after market hours between accounts?

Accepted Answer

Once the trading time is over, you cannot move your trades from regular to MTF or vice versa.

Question 15

How do I move shares/funds between MTF and regular accounts?

Accepted Answer

Movement occurs automatically via back-office software allocating resources optimally; margins and exposure limits adjust next working day.

Question 16

How is the limit determined for MTF facility?

Accepted Answer

Brokers collect 25-45% margin per SEBI; clients typically receive 2-4x limits. RWSPL's limits are subject to SEBI maximums and periodic revision.

Question 17

How is interest charged?

Accepted Answer

Interest @ 18% p.a. with monthly rest will be applicable on debit balance in the combined ledger (Normal + MTF account).

Question 18

Can I withdraw cash from MTF account?

Accepted Answer

A customer cannot withdraw cash against the shares given as collateral but may withdraw excess credit balances via payout instructions.

Question 19

What happens if a permitted stock is removed from the list?

Accepted Answer

Funding must be immediately settled by liquidating positions or paying outstanding amounts.

Question 20

How are corporate actions on MTF shares accounted?

Accepted Answer

Holdings adjust accordingly; dividends are credited to trading accounts upon receipt.

Frequently Asked Questions

Margin Trade Funding (MTF)

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