InvestorQ : Do you think the compulsory stock pledge in the new margining system could be confusing for clients and for brokers?
Priyanka N made post

Do you think the compulsory stock pledge in the new margining system could be confusing for clients and for brokers?

Answer
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Neelam Naik answered.
4 weeks ago


This is going to be a fairly cumbersome shift for the traders and the brokers too. Going ahead, transfer of stocks to the broker pool account will not be permitted. Traders must execute a pledge agreement every time they use stock as margins, which is painful.

Perhaps, the regulator is driven by what happened at Karvy, but that is a one-off case. The problem is that pledge has a cost as each executed pledge entails fee payment to NSDL or to CDSL. Actually, the regulator will be better off putting off this system for some more time.