Can payout in MCX account be stopped by broker if there is a shortage in NSE account

#1
Hi traders

I have an account with CD Equisearch. I had purchased some stocks in the equity account and had a debit of Rs 18000 in my account. I also had some 42000 cash in my MCX account with the same broker. I had requested an internal transfer which was not possible due to obvious reasons. How ever when I requested a payout of Rs 42000 I was not honoured with the same and Rs 18000 which was equal to the shortage in my equity account as on that day was held back.
I have been trying to clarify this with the management of the firm but to no avail. I was planning to raise a complaint with MCX in this regard, but thought to first check with all the experienced guys out here if some one has faced some thing similar and has raised a complaint on such an issue.

This issue is important as this might create a lot of confusion and problem when I have a few positions open and there is some crash in the markets and a debit occurs in equity. If on that day I have a credit in MCX and NSEL and if I request for a payout I would not be given the payout from my MCX and NSEL accounts saying that I have a debit in my equity account. My money in my MCX and NSEL account would lie a dead amount which I will not be able to use to fulfil margin defeciency and neither would I get a complete payout. If this happens then stocks would be sold by the broker, fine by NSE for not being able to fulfil my margin requirement and so on and so forth.

warm regards
ranadagger
 
#2
Re: Can payout in MCX account be stopped by broker if there is a shortage in NSE acco

Is there no one who can throw some light on the point raised above???
 

ashu1234

Well-Known Member
#3
Re: Can payout in MCX account be stopped by broker if there is a shortage in NSE acco

Hi,
Actually exchange has put up restrictions of this inter exchange transfer within same broker as it was misused by the brokers for speculating and taking leverage on behalf of money/stock held in another segment.

Now this practice of holding back payout is wrong as both commodities and equity are entirely different entities from the legal point of view but since they are offering it under one head by doing it they are protecting their interest.
But risk management of different segments can't be linked so in principle its wrong. If you have debit in your account, you should be given one day time to deposit the cheque (standard procedure).
Its better to change broker, or have different broker for different segment or have spouse account for different segment with same broker.
MCX can't do anything in this regard as its internal procedure of the broker you are registered with(mostly small brokerage house do this as far as I know) but this is not the practice in big brokers(I'm associated with one of them).
 
#4
Re: Can payout in MCX account be stopped by broker if there is a shortage in NSE acco

Ashu

I thought that there arises a point of non compliance against the broker and MCX should be able to atleast warn the broker or tell them not to do so in the future, that is if I raise a complaint against the broker to MCX...
Do let me know if you think otherwise.....

with warm regards
ranadagger
 

ashu1234

Well-Known Member
#5
Re: Can payout in MCX account be stopped by broker if there is a shortage in NSE acco

Ashu

I thought that there arises a point of non compliance against the broker and MCX should be able to atleast warn the broker or tell them not to do so in the future, that is if I raise a complaint against the broker to MCX...
Do let me know if you think otherwise.....

with warm regards
ranadagger
Right, its clear case of non compliance denying you payout but I've heard many small broking house doing it (who knows they have your written permission on documents which enable them to deploy their own risk management policies), but if you want to go ahead then you can raise your complaints against investors grievance cell(check out with them 022 6731 8888). Your point is absolutely valid sir.
 

Mr.G

Well-Known Member
#6
Re: Can payout in MCX account be stopped by broker if there is a shortage in NSE acco

Hi traders

I have an account with CD Equisearch. I had purchased some stocks in the equity account and had a debit of Rs 18000 in my account. I also had some 42000 cash in my MCX account with the same broker. I had requested an internal transfer which was not possible due to obvious reasons. How ever when I requested a payout of Rs 42000 I was not honoured with the same and Rs 18000 which was equal to the shortage in my equity account as on that day was held back.
I have been trying to clarify this with the management of the firm but to no avail. I was planning to raise a complaint with MCX in this regard, but thought to first check with all the experienced guys out here if some one has faced some thing similar and has raised a complaint on such an issue.

This issue is important as this might create a lot of confusion and problem when I have a few positions open and there is some crash in the markets and a debit occurs in equity. If on that day I have a credit in MCX and NSEL and if I request for a payout I would not be given the payout from my MCX and NSEL accounts saying that I have a debit in my equity account. My money in my MCX and NSEL account would lie a dead amount which I will not be able to use to fulfil margin defeciency and neither would I get a complete payout. If this happens then stocks would be sold by the broker, fine by NSE for not being able to fulfil my margin requirement and so on and so forth.

warm regards
ranadagger

The exchanges are not even related to your broker! You are confusing your commodity account with MCX/NSEL. The money is with your broker and yes he can stop payment. The exchange cant do anything if your broker is stopping payment.
 
#7
Re: Can payout in MCX account be stopped by broker if there is a shortage in NSE acco

Wel my commodity account is through a broker who is in turn functioning under the rules and regulation of the concerned exchange, which here is MCX. A broker of any exchange would have to function according to the rules of that exchange which will include payout and payin rules as well. Hence I dont think that any broker has the power to act individually without concerning the exchange. This is what I understand.
Please let me know where do you think otherwise Mr G so that I update myself.
 

Mr.G

Well-Known Member
#8
Re: Can payout in MCX account be stopped by broker if there is a shortage in NSE acco

Your broker is a member of the exchange but still the exchange is not concerned with your money as long as you lost the money because of the exchange, Please dont confuse your commodity account with MCX or NSEL, your money is with the broker and not with the exchange. But the money is with your broker. I may be wrong as I am not securities lawyer. You should consult with a professional.
 

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