Definition
In simple terms, margin refers to the collateral that a member has to deposit with the exchange to be able to trade on any given day. It is a risk management system backed with the objective of protecting the exchange against any potential adversity that may arise in the future.

Margin payment by the members
It is necessary to pay the daily margins for all clients (for a rolling settlement) on the working day that follows the trading day, i.e. on (T+1) day. It is the responsibility of the members to calculate margin amount payable by them on the due date. Margin money can be deposited in multiples of Rs 10,000/-, in form of cash/bank fixed deposits (FDRs)/bank guarantee.

Margin payout
NSCCL, at its own discretion, may return the margin amount back to the member on the subsequent day (after adjustment for dues), or may choose to retain whole/part of the cash margin amount payable to a specific member to contain risk.

Collecting Margins from the Client
Just like the Exchange, the members should also have a good risk management system to protect themselves from any possible client defaults. However, it is completely at the discretion of the member to make decision regarding the amount and mode of margins collection.

Violation of Margins
The member shall face following consequences in an event of non-payment of margin or any shortage in margin payment:

Initial Margins
The initial margins that the members are required to deposit with the NSCCL are based on their daily turnover and exposure limits.

Intra-Day Turnover Limit
As per the intra-day trading limit regulation, the total buying and selling (gross turnover) that the member does on an intra-day basis (in a single day), should not be more than 25 times his base capital.

Base Minimum Capital (BMC)
It is mandatory for all the members to deposit and maintain a sum of Rs 10 lakhs as BMC with the Exchange at all times. As per the SEBI guidelines, the composition of BMC should be in the following manner:

Composition of BMC	Cash	FDRs	Eligible Shares or Bank Guarantee
Weightage	12.5% Minimum	12.5% Minimum	Balance

Note:

List of eligible shares that can be deposited as BMC is notified by NSCCL from time to time. BMC can not be treated as a margin payment by the member.

Additional Base Capital (ABC)
The members are also required to deposit Additional Base Capital (ABC) over and above the minimum stipulated collateral in form of liquid assets. This is necessary for covering margins and BMC requirements. The liquid assets that are acceptable by the Exchange as deposits comprises of cash, bank FDRs issued by approved banks, bank guarantees, government securities and units of liquid mutual funds/government securities mutual funds (10% haircut* applicable), or liquid (Group 1) equity shares and other mutual fund units notified by NSCCL from time to time.

Exemptions from margin payments
Exemption from margin payment can be availed under the following circumstances: