To avoid penalty, brokers have been asked by the National Stock Exchange to submit half-yearly net worth certificate for margin trading. A circular issued by NSE said brokers will have to submit to the exchange half yearly networth certificate as on March 31 by May 31 "in order to avoid any delayed/non-submission charges."
Brokers who fail to provide the certificate will have to face the penalty mechanism put up by NSE whereby a fine of Rs 100 per day will be charged for first month from the due date, Rs 200 each day for second month after due date and Rs 300 each day for third month after due date and "thereafter the matter shall be placed before relevant authority for appropriate decision/actions."
Offering margin trading facitlity is allowed to corporate borrowers with net worth of atleast Rs.3 crore. NSE also said that the shortfall in networth would result in deposits being blocked.