StanSoft
699F, Block P, New Alipore, Kolkata – 700 053
Phones : (033)24009240/8804
support@stansoftware.com
www.stansoftware.com

Dear SharePro User,
We are sure that all of you are aware of the imposition of Peak Margin on you from 1st December. Currently, the EOD margin is reported to the exchange by creating a pool of all deposits [cash, pledged shares, epay, etc], and allocating the deposit into the margin requirements [upfront] of all the segments. After having done this, a complex formula is used to determine whether the M2M and Other Margins have been collected in the extra-time provided [usually, T+2]. 
Peak margin, on the other hand, is a new concept that imposes on you the requirement that at the point in time of a client having reached his Peak Margin requirement [actually, only the highest at 4 different points in time], YOU had collected the margin already upfront. This is not as simple as it sounds as the backoffice does not have timestamps for various information it stores [for instance, Bank statements do not have time]. This means that calculating the exact deposit at the exact point in time peak margin was reached may not be simple in Phase-I of the implementation.
Let us look at the following illustration to understand how SharePro proposes to handle Peak Margin in v1. 

Logic of Peak Margin Reporting in SharePro – Version 1
Total Deposit of Client = TDate Deposit + Funds Payout + Unpledged Shares + Early Payin Shares (80%)
 Rs 1,50,000
Allocation will be done in the order in which we do allocation in EOD = Company wise
Client Name Snapshot # Equities
Margin
Equities
Allocation
Derivatives
Margin
Derivatives
Allocation
Currency
Margin
Currency
Allocation
Commodities
Margin
Commodities
Allocation
Client – A 1 125000 125000 125000 25000 12500 1000
Client – A 2 135000 135000 95000 15000 15000 2000
Client – A 3 110000 110000 100000 40000 18000 3000
Client – A 4 0 90000 90000 10000 10000 4000 4000
Peak Margin in EOD files
Client Name Segment Peak
Margin
Margin
Collected
Short
Collection
Client – A Equities 135000 135000 0
Client – A Derivatives 125000 25000 100000
Client – A Currency 18000 0 18000
Client – A Commodities 4000 4000 0

Deposit Value: Therefore, for the purpose of peak margin, the Deposit calculation will be: Deposit as on T-Date Deposit + Funds Payouts made + Shares Unpledged + Early Payins (80%)
The Deposit calculation, for the time being, will assume that Payouts and Unpledges are made post-trading and money was received from clients pre-trading [or at least during trading]. However, in the future, every system will eventually need to keep timestamps for all movement of monies and shares.
Allocation Order: The allocation, as shown in the example above, will be in the same order as the EOD process. – that is, company wise (01,02,03…).  However, it can be argued that the allocation order should be dynamic for each snapshot. Let us see this with an example of the 2nd snapshot shown above. 

Client Name Snapshot # Equities Equities
Allocation
Derivatives Derivatives
Allocation
Currency Currency
Allocation
Commodities Commodities
Allocation
Client – A 2 135000 135000 95000 15000 15000 2000

If you look carefully, in actual terms the margin is short as Rs 1,50,000 does not cover all the required margins across segments, and yet, because we are allocating in the order of companies, we have allocated Rs 1,35,000 to CM segment and NOT reported short collection of peak margin. However, in forum meetings, for the time being, it has been agreed that the allocation should be in the same order as that of the EOD process.
We request all our users to carefully go through this and get back to us asap please with your suggestions.

SharePro: Peak Margin Reporting from 1st December, 2020