Why stocks are getting unpledge when there is a limit crossed from clearing member?

Why stocks are getting unpledge when there is a limit crossed from clearing member?

Each Clearing Member has limits set on the number of shares to be pledged of a particular scrip by the Clearing Corporation. Once such a limit is crossed, the shares are unpledged and credited into the Demat Account of the Client. 


For Instance, X ltd, a clearing member, has a limit of 10,00,000 shares of RIL that can be pledged with them. Mr. Y, a client of Fyers has 11,00,000 shares of RIL and has pledged to get additional margins to trade in equity derivatives. The margins are released on an End of the Day (EOD) basis. As we can see, X ltd. is not allowed to accept more than 10 lakh shares of RIL, the pledge will be invoked, and the shares will be credited back to Mr. Y on the next day.


Note: The invocation of the pledge will be thoroughly communicated via email to the clients.


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