New SEC Rule

Buying power will limit to 40% from ur portfolio, Not 50%.
If you not Settle ur dues within 5 days, ur buying power become 0.

Intereseting , Small Traders are in danger !!!!!!!!!!!!!!!!
(Can big one as well, ha ha )
Is this true or rumor?

Where did you get the news?
some people are talking about it but no official announcement.

But I wouldn't be much surprised it they impose a new rule out of the blue, given their previous track record.

My broker told me, From Tuesday onwards...

Sooooooooo saaaaaaaad.

Stock Predictor wrote:Buying power will limit to 40% from ur portfolio, Not 50%.
If you not Settle ur dues within 5 days, ur buying power become 0.

Intereseting , Small Traders are in danger !!!!!!!!!!!!!!!!
(Can big one as well, ha ha )
Is this true or rumor?

If you have margin credit this problem doesnt arise.

I'm with Asha Phillips and they have never ever let you keep credit over t+5 anyway! The guy i'm with tells me if I have any credit on 5th day to clear and give a call by 2.20! If not they force sell in last 10 minutes!

without official announcement it is not advisable to talk about this.if any let us know.

It is quite possible . ...Some have already experienced a similar situations , gathered from this site ......there were threds like no buying power for me

so what happen to brokers right to sell shares??
what is the meaning of just reducing buying power from 50% to 40% ?

I am not sure of this, but I think the 50% buying power was always at broker's discretion. I think SEC decided that this too is 'dangerous'.

To address Econ's question, I think broker's right to sell shares is still there. (BEcause it is a private contract between the broker and the client). However knowing Colombo, SEC may say that 'Buying power will be brought down to 40% and brokers cannot force sell'

Then it is very difficult to buy a share at the beginning… unfair. …all these restrictions for small scale short term investors…

Great decision if they implement.

If you don't allow force sell what do you expect them to do? If you buy you have to pay. If you don't pay they have to take it back. Is it that hard to understand?

If market is going down and any rules are common to all, i think purchases should be allowed only to cash deposited with brokers because all investors then can keep their holdings until market start recovery.

Hiru wrote:If market is going down and any rules are common to all, i think purchases should be allowed only to cash deposited with brokers because all investors then can keep their holdings until market start recovery.

Does it mean only medium term investments work in the CSE?

Soundchips wrote:

Hiru wrote:If market is going down and any rules are common to all, i think purchases should be allowed only to cash deposited with brokers because all investors then can keep their holdings until market start recovery.

Does it mean only medium term investments work in the CSE?

I have no idea about the length of the issue. I intended that people can stop digging their existing holes if they do not use credit because there is no force selling and result will be the decreasing rate of market going down

I don't do on credit or margin

fundamental stocks have to come down to about half the current price today or they have to double the profits. In the last few quarters many fundamentally strong companies sold off lots of things to make massive profits. They won't be able to do that every quarter.

not many investors sell with losses. force selling is not applicable to those who settle in time. those stocks survive..

Rajitha wrote:I'm with Asha Phillips and they have never ever let you keep credit over t+5 anyway! The guy i'm with tells me if I have any credit on 5th day to clear and give a call by 2.20! If not they force sell in last 10 minutes!

I think friend U better transfer ur PF to another,at least some what client freindly broker company.

Though its still a rumor I think its quiet possible, this is something I have been expecting from SEC.

Then there is less room for bubble formation, what ever the market recovery would be on actual funds and sustainable. I look for shares with actual growth.

If someone buys a share he or she will have to pay for it. The extent of the period is T+5. (It is upto the relevant authorities to see whether this period is adequate.)The next step is to collect the monies within the stipulated period and there should be a right mechanism to do this. As far as monies are collected within the set period of time, then there is no need for reduction of broker credit to 40% .

If this is true, can not understand the logic behind 10% reduction insted of going for a total ban of credit from brokers.If it is a total ban, it will not be in favour of brokers, as giving credit increases their business volumes and lose interest on credits granted to clients.

Anyway Looking forward to see the truth of this finding.

pushpakumara wrote:If someone buys a share he or she will have to pay for it. The extent of the period is T+5. (It is upto the relevant authorities to see whether this period is adequate.)The next step is to collect the monies within the stipulated period and there should be a right mechanism to do this. As far as monies are collected within the set period of time, then there is no need for reduction of broker credit to 40% .

If this is true, can not understand the logic behind 10% reduction insted of going for a total ban of credit from brokers.If it is a total ban, it will not be in favour of brokers, as giving credit increases their business volumes and lose interest on credits granted to clients.

Anyway Looking forward to see the truth of this finding.

T+5 is only one side of Equation what about the seller side? Some one who sell should get the money for it? if this is going to be extended, lets say T+30, seller will have to wait for 30days to collect his money. Would you accept that?

Tiger wrote:

pushpakumara wrote:If someone buys a share he or she will have to pay for it. The extent of the period is T+5. (It is upto the relevant authorities to see whether this period is adequate.)The next step is to collect the monies within the stipulated period and there should be a right mechanism to do this. As far as monies are collected within the set period of time, then there is no need for reduction of broker credit to 40% .

If this is true, can not understand the logic behind 10% reduction insted of going for a total ban of credit from brokers.If it is a total ban, it will not be in favour of brokers, as giving credit increases their business volumes and lose interest on credits granted to clients.

Anyway Looking forward to see the truth of this finding.

T+5 is only one side of Equation what about the seller side? Some one who sell should get the money for it? if this is going to be extended, lets say T+30, seller will have to wait for 30days to collect his money. Would you accept that?

Quite agreed Tiger. I was thinking of a reasonable time frame T+7 to T+10 and not beyond that. This is ofcourse a seperate item to be discussed.