New Delhi, Aug 24 (PTI) Stock brokers' association Anmi has sought waiver of penalties imposed on such traders for reporting a shortfall in collection of client collateral for a period of at least 15 days beginning from August 1.

Under the Sebi rules, stock brokers need to pay fines for reporting a shortfall in the collection of client collateral.

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In a letter to market regulator Sebi on August 19, stock exchanges -- BSE and NSE -- and their respective clearing corporations, the Association of National Exchange Members of India (Anmi), has also requested to refund fines levied on its members for shortfall in collection during the said period.

In addition, it asked for an extension to submit final allocation files from the deadline of 8 pm to next day 12 noon.

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"These reforms will help in ease of doing business while adhering to the necessary compliances. We are confident that the regulators and exchanges will see merit in our recommendations and make necessary amendments," Kamlesh Shah, President at Anmi, said.

Apart from these requests, Anmi, in its letter, also highlighted the technical glitches and infrastructure issues at the level of clearing corporations faced by stock brokers. Also, they are facing issues while uploading the allocation file.

Accordingly, Anmi has requested to consider "waiver of applicable penalties against shortfall in the collection based on EOD (end of the day) minimum upfront margins for a period of at least 15 days (from August 1, 2022)".

Anmi, a grouping of around 900 stock brokers from across the country, conducted a survey among its members and received responses from 204, and of which, 29 reported that a fine of over Rs 36 crore was imposed on them for shortfall in collection of client collaterals.

Sebi's margin rules mandates trading members to collect the amount upfront (before the trade) at the time of clients entering the relevant positions or undertaking the relevant trades. The rule that was implemented last year restricted brokers' ability to fund clients' intraday positions.

As per the rules, brokers are required to take four snapshots of margin during the session at random times and based on that, the snapshot with the highest margin requirement is considered for payment. Earlier, this was done only at the end of the day.

In May, the Securities and Exchange Board of India (Sebi) tweaked the rules, making the beginning of the day margin to be considered as peak margin. This is only in respect of the collection of upfront margin. The framework came into effect from August 1.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)