Margin Funding

How are Cash and Shares-as-Margin (SAM) limits/margins blocked and released for a MTF position?

When an  MTF (Margin Trading Facility)  position is created using both  Cash Margin  and Shares-as-Margin (SAM), margin blocking and release will follow the below sequence.

Limit/Margin Blocking Process at the Time of Purchase

At the time of creating an MTF position:

• Available SAM limits are utilized first toward the margin requirement.
• Any remaining margin requirement is then blocked from the available cash balance.

This ensures efficient utilization of pledged securities before cash funds are used.

Margin Release Process at the Time of Sale

When an MTF position is fully or partially sold, the margin is released in the reverse order:

• The Cash margin is released first; back to the cash balance.
• The remaining margin is released as SAM limits, thereafter.

Illustrative Example

MTF Margin Required: ₹2,00,000

Available balances before purchase

• Shares-as-Margin (SAM): ₹1,50,000
• Cash Balance: ₹2,00,000

At purchase:

• ₹1,50,000 blocked from SAM
• ₹50,000 blocked from Cash balance

If 50% of the position is sold (₹1,00,000 margin released):

• ₹50,000 released to Cash balance first
• ₹50,000 released to SAM limits thereafter

Key Principle

• Blocking Order: SAM → Cash
• Release Order: Cash → SAM

This process applies automatically for both partial and full square-off of MTF positions