As per SEBI guidelines, authorising MTF Positions on the CDSL website is mandatory. This is because, when a broker provides funding through MTF, they are required to pledge the MTF shares with CDSL. Pledging is carried out to protect the interest of the broker in case a client is unable to repay the borrowed amount.
For this process, CDSL charges a one-time fee of Rs.20 (+tax). When you exit the MTF position, the shares are unpledged, and CDSL will charge Rs.20 (+tax) again.
Terms & Conditions Apply:
RIGHTS & OBLIGATIONS OF STOCK BROKERS & CLIENTS FOR MARGIN TRADING FACILITY (MTF) - NSE & BSE