In the 'Change Brokerage Plan' box, click on the 'GO' button.
To Pledge Securities, Follow These Steps:
Step 1 – Mobile User, Click on BO Modification button on top right hand side inside profile menu.
Web User, Click on BO Modification menu inside profile menu
Share or stock buyback is the practice where companies decide to purchase their own share from their existing shareholders either through a tender offer or through an open market.
Companies buy back their shares by two methods, either by the Open Market or through Tender offer.
Open Market offer: Companies can buyback their shares directly from open market by the sellers. This buyback can last for months as disclosed by the company to the SEBI.
Tender Market offer: Companies offer a buy back of its shares at a particular price at which investors can apply. The tender market buybacks can be applied through stock broker’s platforms.
ProStocks offer buyback of shares through its trading application.
Margin Pledge and Repledge (MPR) is a process that allows you to use your Demat holdings as collateral to obtain trading margins from ProStocks. Here’s how it works:
When you want to trade with ProStocks, you need to maintain margins for your trades. These margins can be in the form of cash or stocks.
In the traditional system, when a client wants to pledge their stocks to obtain margins, they transfer the securities from their Demat account to the broker’s account. The broker then pledges these securities to the Clearing Corporation.
However, this transfer of title (ownership) of the securities leaves room for potential misuse by certain brokers.
To address this issue, a new pledge system was introduced, which went live from August 1, 2020.
In this new system, the stocks do not leave the investor’s Demat account. Instead, a pledge is marked in favor of the broker.
The broker is required to open a separate Demat account labeled ‘TMCM – Client Securities Margin Pledge Account’ for this purpose (TMCM stands for Trading Member Clearing Member).
The broker then re-pledges these securities in favor of the Clearing Corporation and obtains margins.
No Misuse of Securities: Since the stocks remain in the investor’s account, there is less chance of misuse of securities. It also prevents the possibility of pledging one client’s stocks to offer margin to a different client.
Corporate Actions: In the new pledge system, the client receives all cash and non-cash corporate actions (such as dividends, bonus, rights, etc.) because the stocks are held in the client’s collateral account.
What is the process of margin pledge and re-pledge through the trading platform?
What is the process of margin pledge and re-pledge through Back-Office?
Please note that the new pledge/re-pledge mechanism enhances investor safety by minimizing the risk of securities misuse and ensuring transparency in the process. If you have any more questions or need further clarification, feel free to ask us!
