Risk Management Policy

This page contains important information regarding the risk management policy which applies to your trading and demat account. The policy continues to evolve and may be modified in line with market dynamics, business plans, management strategy and internal risk assessments from time to time.

Products

Customers can place orders for Delivery and Intraday trades across segments, i.e. Cash and Derivatives (FnO), on DPTK.

In the Cash segment, for Delivery or CNC trades, customers must have ledger funds of up to 100% of the gross value of the stock at the time of the transaction. Currently no margin is provided for Delivery or CNC trades on DPTK.

In the Cash segment, for Intraday trades, DPTK customers are provided a limit as per the exchange-defined VAR+ELM for the respective scrip, subject to a minimum of 20%. For example, if customer A has an effective ledger balance of Rs. 50,000 and the VAR+ELM for scrip X is 25%, the customer can buy/sell scrip X only up to Rs. 2,00,000 for intraday.

For Delivery / Carry-forward derivative trades, the DPTK customer is provided margin as per the exchange-defined margin (Span + Exposure + Delivery + Special Margin). For Futures and Options traded on NSE/BSE, the limit is as per the margin requirement of the respective contract. For example, if the margin required for 1 lot of Nifty is Rs. 1,50,000, the customer needs an effective ledger balance of at least Rs. 1,50,000 to initiate the trade.

For derivatives, specific criteria define the contracts that can be traded via DPTK, for both normal and intraday trades, to protect customers from market volatility and fluctuations.

Table 1: Derivative contracts allowed for trading

Table 2: Product-wise intraday limits

Customer Trading Limit

The trading limit available to customers is a function of their combined ledger across all segments plus the value of pledged securities.

Single order limit: to avoid erroneous trading, the following single-order maximum cap applies to any order.

Restricted Stocks and Contracts

In the cash segment, illiquid stocks are those that cannot be sold easily due to limited trading volume. They carry higher risk because it is difficult to find buyers compared with frequently traded shares. Stocks that are not liquid are restricted for purchase on DPTK. Restricted stocks include unsolicited-SMS stocks, GSM stocks and IRP Stage 1 and above, as decided by the Risk Policy or updated based on exchange communication. DPTK reserves the right to refuse execution of any transaction request on such restricted securities, or to reduce the customer’s open market interest in such securities / contracts. Trade-to-trade scrips are not allowed in intraday; however, a client who already holds the shares can sell up to the holding quantity, and any purchase of the same share will be treated as a fresh purchase.

In derivatives, DPTK restricts trading in some option and future contracts to avoid price manipulation and to protect customers. The restriction is based on open interest: for a derivative to be permitted, minimum open interest should be 10 lots in that contract and the contract expiry should be within 18 months from the current date.

Norms for trading in restricted scrips: to exercise additional due diligence, some scrips are restricted on the DPTK platform. These can be bought through the centralised call-and-trade desk under predefined norms. DPTK shall not be responsible for non-execution or delayed execution of orders in restricted scrips, or any consequential opportunity or financial loss to the customer.

• For buying a restricted scrip, the client must have a clear credit in the account.
• The order will be executed after due diligence by RMS.
• Maximum order value will be 10% of the exchange volume of that scrip.
• Restricted scrips are traded only through the centralised call-and-trade desk.
• Restricted scrips bought through the centralised desk cannot be sold the same day.

Square-Off Policy

Timer-based / intraday square-off: DPTK follows a timer-based intraday square-off policy — all intraday positions are squared off by RMS before market close. All pending / unexecuted / partial orders are cancelled as per the intraday product feature. At each segment’s square-off time, positions are squared off at the best available price. No fresh position or order cancellation is allowed after 3:12 pm for the intraday timer.

Near circuit: in the cash segment, fresh intraday positions may not be allowed once the stock’s LTP reaches 90% of the day’s circuit limit. RMS also reserves the right to square off adverse open positions (existing positions in loss) when the LTP reaches 90% of the circuit limit, subject to the best available price and quantity. This applies only to higher-leverage stocks (4x and 5x) and non-F&O stocks.

If an intraday position remains open: if, due to connectivity failure, system issues, illiquidity or any other circumstance beyond control, an intraday position is not squared off, it shall be treated as a carry-forward position. RMS reserves the right to liquidate such positions on the next trading day as soon as the market opens, in case of margin shortfall or insufficient MTM coverage. If any long / short position remains open due to illiquidity or any other reason beyond the company’s control, all resulting losses, obligations and charges shall be borne solely by the client. For non-squared-off MIS short positions, 20% (or more) extra margin will be blocked until auction settlement is completed.

Mark-to-market square-off: DPTK reserves the right to square off all intraday positions (cash and derivatives) and carry-forward derivative trades where MTM loss crosses 80%. Positions will be reduced on a best-effort basis and the customer will be liable for any losses on square-off; all pending orders will be cancelled. Clients must maintain coverage of 20% across all segments (ledger + MTM); if coverage falls below this, RMS may sell client holdings up to the required coverage.

Ageing-based square-off: DPTK reserves the right to liquidate stocks and/or mutual funds when a ledger debit ages beyond T+4 days. They will be sold on T+5 after the ledger debit — e.g. for trades executed on Monday, the square-off happens the next Monday (T+5, T = trading day). RMS liquidates stocks / MF up to 105% of the ageing debit or a single stock’s value, whichever is greater, valued at the previous day’s closing price.

• Stocks are liquidated first, followed by mutual funds; within mutual funds, liquidation follows settlement priority T1 → T2 → T3.
• Once a mutual fund square-off order is triggered it cannot be reversed, even if the client clears the ageing amount afterwards.
• The client remains blocked in ageing until the MF redemption proceeds are received.

Margin-shortfall square-off: customers must maintain the defined margin to retain derivative (FNO) positions. RMS may liquidate positions up to the required margin at any time; if the defined or exchange margin is short, any open position can be squared off at DPTK’s discretion.

Margin shortfall penalties: as per the NSE circular dated 1 October 2024, margin shortfall penalties imposed by the exchange on the following margins may be passed on to clients:

• Dishonoured cheques
• Changes in hedge positions
• Delivery margin
• Special margin
• Tender margin
• Additional margin
• Mark-to-market margins

CUSPA process: as per SEBI circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2022/153 dated 11 November 2022 on handling of clients’ securities by Trading Members / Clearing Members, if a client fails to pay for securities purchased, DPTK shall pledge the securities in the client’s demat account to the Client Unpaid Securities Pledgee Account (CUSPA). To mitigate risk, DPTK pledges securities worth at least 130% of the net debit balance — e.g. for a debit balance of Rs. 100, securities worth at least Rs. 130 are pledged to CUSPA. If the client meets the fund obligation within five trading days after pay-out, the pledge is released and the securities become free balance. If not, DPTK may sell the securities pledged in CUSPA to recover the dues within four days from the pay-out date. DPTK invokes the pledge only against the client’s delivery obligation; on invocation the securities are blocked for early pay-in in the client’s demat account, with a trail maintained in the CUSPA.

T+5

The pay-later product offers leverage on scrips not eligible for the margin trading facility, allowing you to hold a position for up to 5 trading days (excluding Saturdays, Sundays and holidays).

How T+5 works: if you buy securities in the T+5 product and your trading ledger goes negative, the securities are automatically marked for pledge to the Client Unpaid Securities Pledgee Account (CUSPA). If payment is not made within T+5 days, the risk management team will sell the unpaid securities as per the RMS policy, and they will be invoked to the CUSPA account to meet the exchange pay-in obligation.

Physical Settlement

Equity derivatives: on expiry day, only intraday trading is allowed in stock futures; no fresh carry-forward position is allowed, and no fresh position is allowed in stock options in any product type. To take or give physical settlement of stock future / stock option contracts, customers must maintain margin of 100% of the contract value before 10:00 am on expiry day (Tuesday). If there is a shortfall (less than 100% of contract value), DPTK may square off all ITM, ATM and OTM positions in shortfall. If a position cannot be squared off — e.g. due to liquidity constraints, or an option turning in-the-money during market hours — the costs (penalties / losses) of physical delivery will be borne by the customer. On expiry day, delivery margin is blocked for all long stock option positions (ITM, ATM, CTM), calculated as per exchange norms at VAR+ELM % of the underlying stock or 20%, whichever is higher.

What is CTM (close-to-money)? CTM strikes are out-of-the-money but near the underlying’s spot price, typically within a 3–5% range; delivery margin is blocked on them as per the RMS policy, and on expiry day they are treated the same as ITM options for physical settlement. Example, with the underlying at ₹1,450 on expiry:

• To give delivery (short stock future, short ITM call or long ITM put), ensure the same stock quantity is free in your demat account and E-DIS is marked for that quantity (if you are a non-POA client).
• To take delivery (long stock future, long ITM call or short ITM put), ensure full contract-value funds.

Payout of Funds

Customers can withdraw the amount available in the DPTK trading account at any time by placing a fund payout instruction on the trading platform. The withdrawable amount is calculated as follows:

If the customer has traded at the time of the payout request and wants a full payout, the system releases the payout after deducting 5% or Rs. 5,000, whichever is lower. Funds added on any day are available for withdrawal the next day.

Sale of Securities - EDIS

Demat Debit and Pledge Instruction (DDPI): clients can also sell without E-DIS by executing a DDPI in favour of DPTK, which removes the need to enter a TPIN to pre-authorise sale transactions.

Credit for Sale

As per regulatory changes, the trading limit from the credit received against a delivery sell is available for further purchases or new positions in other exchange segments only after successful early pay-in of the securities. The CFS benefit available is:

• Selling from free holding — flat 100% CFS benefit.
• Selling stock from CUSA — no CFS benefit.
• Buying and selling the next day (BTST) — no CFS benefit.
• Selling stock pledged for margin — a minimum of 80% or (100% less the stock’s haircut).

Pledge & Unpledge

As per SEBI circulars SEBI/HO/MIRSD/DOP/CIR/P/2020/143 dated 29 July 2020 and SEBI/HO/CFD/DCR-2/CIR/P/2020/164 dated 2 September 2020, all collateral margin can be given only through a securities pledge to the Clearing Corporation (NCL). The request is initiated by the customer.

• Pledge is allowed for selected stocks defined by the exchange and the DPTK RMS team.
• Pledge benefit is given on the previous day’s close or LTP, whichever is lower.
• Pledge benefit can be used across all segments on a combined basis.
• Pledge timing: up to 5 PM on exchange working days.

Unpledge of shares: on an unpledge request, the system checks there is no margin used or negative balance against the pledged holdings; the collateral benefit is then removed and the limit reduced in real time. When you sell a pledged stock, it is unpledged in real time, in line — you don’t need to unpledge before selling. Unpledge timing: up to 3 PM on exchange working days.

Unpledge of mutual funds: pledged units cannot be redeemed directly — first unpledge them, then place a redemption request. Unpledge requests are accepted between 9:00 AM and 3:00 PM on business days and the units return to your free units the next business day (e.g. requested Monday, redeemable Tuesday). The system checks there is no margin used or negative balance against the pledged units; if so, the collateral benefit is removed and your trading limit reduced in real time.

Dormant Account

An account is marked dormant if no trading activity is observed for 24 months. Dormant customers are marked inactive on the DPTK platform and no further trades are allowed.

Delayed Payment Charges

As per SEBI circular SEBI/HO/MRD2_DCAP/CIR/2021/0598 dated 20 July 2021, effective 2 May 2022, Trading Members must maintain collateral at the client level in a 50:50 ratio of cash and non-cash, segment-wise.

• Clients must keep at least 50% of the total margin in cash or cash equivalents; the remaining 50% may be non-cash collateral such as pledged shares.
• Cash equivalents include liquid mutual funds / ETFs, Government Securities (G-Sec), Sovereign Gold Bonds (SGB) etc.
• This applies to both intraday and overnight positions.
• Any shortfall in the required cash / cash-equivalent margin attracts Delayed Payment Charges at 0.0439% per day, levied until the cash margin obligation is fully met.

Another example: a customer with a clear ledger of Rs. 50,000 and non-cash collateral (pledge after haircut) of Rs. 1,00,000 takes a derivatives position needing Rs. 1,50,000 margin. Rs. 75,000 must be cash, but the customer has only Rs. 50,000, so charges apply on the Rs. 25,000 shortfall.

Voluntary Freezing

If you think your DPTK trading account has been compromised or you notice suspicious activity, you can voluntarily freeze your trading account by call or email.

• All your pending orders are cancelled with immediate effect.
• Your open positions are NOT squared off.
• You are logged out of all active sessions.

You will be informed by email, along with details of any open positions. Re-enabling trading: trading can be re-enabled only after 24 hours of voluntary freezing — request it on the same number or email, and we will confirm by email once your account is ready to trade again. This policy is in accordance with exchange circulars NSE/INSP/61529 and 20240408-12 (BSE), effective 1 July 2024.

Breach of Gross Exposure

As per the NSE circular on position limits in the equity derivatives segment, open interest is measured at portfolio level by computing the net delta-adjusted open positions across futures and options for an underlying at a given time.

Position limits for index futures and index options at client level: net end-of-day FutEq (futures + options) OI limit of ₹1,500 crore and gross FutEq OI of ₹10,000 crore (neither gross long nor gross short FutEq OI may exceed ₹10,000 crore). Clients may take additional exposure in equity index derivatives subject to:

• Aggregate short positions in index derivatives (short futures, short calls and long puts) shall not exceed the holding of stocks (FutEq terms for index options, gross notional for index futures).
• Aggregate long positions in index derivatives (long futures, long calls and short puts) shall not exceed the holding of cash and cash equivalents, government securities, T-Bills and similar instruments.

If a client exceeds these limits, the exchange collects additional margin on the excess from the Trading Member, held in cash for one month. If the client fails to maintain this additional margin, DPTK will levy delayed payment charges on the shortfall at 0.0439% per day until the margin is released.

Position Violation in F&O Ban

• During the ban period, clients must ensure their future-equivalent open interest only reduces and does not increase or change direction. Any trade that increases future-equivalent open interest is a violation, and all exchange penalties for it are borne fully by the client.
• If future-equivalent open interest increases due to a change in ban-period positions, RMS reserves the right to liquidate your position.

Market Price Protection

Market Price Protection (MPP) safeguards market orders by automatically converting them into limit orders at a predefined threshold, preventing execution beyond a set percentage from the current market price.

• Index options at open: the 10% cap applies only in the first few minutes after the open, to support liquidity.
• Iceberg orders: through the trading day, iceberg orders keep a ±10% cap to prevent excessive exposure.