What happens if I do not pledge my MTF holdings?

Margin Trading Facility (MTF) allows investors to purchase stocks by borrowing money from a broker. It enables trading with more funds than available in one’s account, using cash or shares as collateral. To preserve the usage of MTF benefit, you need to pledge your MTF shares on time.

As per Arihant’s procedure, If you fail to authorise your MTF (Margin Trading Facility) trades by 7:00 PM on the same trading day, the trades will automatically be converted into delivery transactions by the end of the following trading day. These converted trades will appear under your holdings from the T+1 day. 

In the event that you do not maintain sufficient funds in your account after this conversion to delivery, the shortfall amount will need to be recovered. For doing this, your holdings may be sold off by T+2 days to settle the dues. To avoid forced liquidation and maintain trading flexibility, it is important to authorise your MTF trades on time and ensure your ledger has enough funds to cover any conversion.