BASE MINIMUM CAPITAL

A

abhishreshthaa

Abhijeet S
BASE MINIMUM CAPITAL

  • For valuation of approved shares and securities, a hair-cut of 15% is applied, i.e. only 85% of the value of securities tendered is considered

  • A weekly valuation of securities is done so that any depreciation in the value of securities due to fall in market prices can be collected from the members within the shortest possible time and the Base Minimum Capital deposited by the members with the Exchange is kept intact.

EXAMPLE

  • Total amount brought in by the member = Rs. 10 lakhs

  • Amount in Cash = Rs. 125000

  • Amount by way of Fixed Deposit = Rs. 125000

  • Assume amount by way of bank guarantees=Rs 325000

  • Actual amount of securities = Rs 500000

  • Thus amount by way of securities after hair cut = 425000

:SugarwareZ-202:
 
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