Let's reshape it today. Corning Gorilla Glass TougherTogether. ET India Inc. ET Engage. ET Secure IT. Suggest a new Definition Proposed definitions will be considered for inclusion in the Economictimes. Settlement Option Under a settlement option, the maturity amount entitled to a life insurance policyholder is paid in structured periodic installments instead of a 'lump-sum' payout. Shareholder value Shareholder value is the value enjoyed by a shareholder by possessing shares of a company.
It is the value delivered by the company to the shareholder. The regulator considered this mechanism risky and has hence instituted the system of pledging of shares as a safety net for investors. The regulator has made it compulsory for investors to maintain a minimum margin of 20 percent before a trade is executed. So, now, if you wish to buy stocks worth Rs 50,, a compulsory margin of Rs 10, is necessary, even if you sell the same stock within the next two days. There is, however, some relaxation in margins for shares sold and early pay-ins to the exchange on the same day.
Except for initial teething issues in implementation until the system stabilises there is no disadvantage. In fact, this can be a bedrock for the growth of the capital markets and its efficient functioning. Every significant transition heralds a new beginning and the hope of better outcomes.
Let us look forward to a safer and more transparent stock trading ecosystem for all stakeholders. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment.
No worries for refund as the money remains in the investor's account. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from CDSL on the same day.
Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms. Check the frequency of accounts settlement opted for.
If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days or 30 days if you have opted for 30 days settlement.
In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. Brokers are not permitted to accept transfer of securities as margin. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason.
Homebuyers can sometimes pledge assets, such as securities, to lending institutions to reduce or eliminate the necessary down payment. With a traditional mortgage, the house itself is the collateral for the loan. Without a significant down payment, the borrower will likely also have a higher interest rate. The pledged asset can be used to eliminate the down payment, avoid PMI payments, and secure a lower interest rate. The borrower retains ownership of the assets and continues to earn and report interest or capital gains on those assets.
However, the bank would be able to seize the assets if the borrower defaulted on the mortgage. The borrower continues to earn capital appreciation on the pledged assets and gets a no-down-payment mortgage. A pledged-asset mortgage is recommended for borrowers that have the cash or investments available and don't want to sell their investments to pay for the down payment. Selling the investments might trigger tax obligations to the IRS.
The sale may push the borrower's annual income to a higher tax bracket resulting in an increase in their taxes owed. Typically, high-income borrowers are ideal candidates for pledged-asset mortgages. However, pledge assets can also be used for another family member to help with the down payment and mortgage approval. To qualify for a pledged-asset mortgage, the borrower usually needs to have investments that have a higher value than the amount of down payment.
If a borrower pledges security and the value of the security decreases, the bank may require additional funds from the borrower to make up for the decline in the asset's value. Although the borrower retains discretion as to how the pledged funds are invested, the bank may impose restrictions to ensure the pledged assets are not invested in financial instruments that are deemed risky by the bank.
Such risky investments may include options or derivatives. Further, assets in an individual retirement account IRA , k , or other retirement accounts cannot be pledged as assets for a loan or mortgage. The use of pledged assets to secure a note has several advantages for the borrower.
However, the lender will demand a specific type and quality of investments before they will consider underwriting the loan. Also, the borrower is limited to the actions they may take with the pledged securities. In dire situations, if the borrower defaults they will lose the pledged securities as well as the home they purchased. The borrower must continue to report and pay taxes on any earnings they receive from the pledged assets. However, since they were not required to sell their portfolio holdings to make the down payment, it will not place them into a higher tax income bracket.
The ability to trade the pledged securities might be limited if the investments are stocks or mutual funds.
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