On the date of purchase, after trading hours, respective trades are booked under Margin Trade Funding ledger of the client and raised the pledge request towards pledging of shares on the trade date itself after the trade process.   On raising the pledge request in the depository system, CDSL will send an email and SMS to the client’s registered email ID and mobile number.

On receipt of the SMS and Email, client is expected to confirm the purchase position pledge either on the purchase date or next working day or the date of settlement before the shares pay-out from the exchange.  Normally, pay-out of securities processed at the exchange level at around 1.00 p.m. and expected the clients to confirm the pledge request raised on purchase date before 1.00 p.m. on the settlement date.  

On completing the above process, client’s purchase position is continued to be funded till the client wishes to retain the position in funding.  Client can make the payment of purchase value along with interest for the period of funding and get these shares are released into their demat account or sell the funded stocks and clear the debit.

If the client failing to confirm the pledge, then purchase trade is moved by the system from MTF funding position into the normal ledger and funding withdrawn.  Being the funding withdrawn, then the purchase value moved into the normal ledger.  If there is adequate credit balance in the ledger, those shares are delivered into the demat account of the client.

If there is no adequate credit in the ledger of the client, then purchase shares are retained by the broker in the broker CUSA account.  Clients are expected to make the payment of the purchase value on or before 7 days from the date of purchase.  Failing which, the respective positions are sold in the prevailing market price on the 7^th day, and credit entry will be passed into the client’s trading account as per SEBI regulations.