Rupeezy's Risk Management (RMS) team can square off your MTF position — partially or in full — if you don't clear a margin shortfall in time, if your mark-to-market loss crosses a set threshold, or ahead of certain corporate actions. This is laid out in Rupeezy's RMS Policy, and it can happen with or without prior notice to you.
What counts as a margin shortfall on an MTF position?
Your margin can fall short of what your MTF position requires for several reasons — a market move against you, a margin hike, mark-to-market (MTM) losses, interest charged on the funded amount, or the stock being removed from the MTF list or shifted to the trade-to-trade (BE) series.
How long do I get to add margin before RMS acts?
Once you receive a margin call, you're expected to clear the shortfall right away — the timeline below is not a grace period you can rely on:
- If the shortfall stays unresolved for more than 3 working days, RMS may liquidate your position at its own discretion any time after that.
- If it's still not met by the 5th working day from the margin call, your position is proportionately reduced on that day — with or without any further intimation.
Can RMS square off my MTF position immediately, without a margin call?
Yes, in three situations RMS can liquidate part or all of your MTF position right away, with or without prior notice:
- MTM loss hits 25% of your margin — once the mark-to-market loss on your MTF position reaches or exceeds 25% of the total margin/deposit backing it, RMS can square off the proportionate position at any time.
- Losses cross 80% of your deposited funds — during sharp market moves or critical margin utilization, RMS liquidates positions as early as possible to contain risk once your losses exceed 80% of your deposited funds.
- A corporate action is coming up — for demergers, buybacks, splits, takeovers, and rights issues, your MTF position may be squared off one trading day before the ex-date, unless you convert it to Delivery by paying the required margin in advance.
Which position gets squared off first if I hold both F&O and MTF?
Rupeezy squares off F&O positions first to avoid additional penalties or costs, then MTF:
- Margin short only in F&O → your F&O position is reduced/squared off.
- Margin short only in MTF → your MTF position is reduced/squared off.
- Margin short in both → F&O first, then MTF.
Does missing the pledge deadline also cause a square-off?
Rupeezy auto-pledges MTF shares, so this usually happens without you doing anything — but if the pledge isn't approved by T+1 day for any reason, Rupeezy shifts that position out of MTF into Delivery instead, and it's treated as a normal delivery trade.
What if a stock I hold under MTF is removed from the MTF list?
Square off that position before the stock's effective removal date from the MTF category.
Things to keep in mind
- Rupeezy isn't responsible for any loss, cost, or damage from an RMS-triggered square-off — you remain liable for any debit balance or loss beyond the margin available in your account.
- Monitor your MTF positions and margin regularly rather than waiting for a margin call — RMS is authorized to act with or without intimation.
- The full RMS Policy document, along with Rupeezy's other policies, is available from where-can-i-read-rupeezys-policies-and-procedures.md.