New Rules for credit

ssb · 1 New Rules for credit Wed Aug 17, 2011 2:54 pm

ssb

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any one know what is basic rules for credit ,
did T+5 change to T+15
that mean i buy on 1st day i have to pay before 16th day
please explain

fair investor · 2 Re: New Rules for credit Wed Aug 17, 2011 3:07 pm

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@ssb wrote:any one know what is basic rules for credit ,
did T+5 change to T+15
that mean i buy on 1st day i have to pay before 16th day
please explain

No more T+ rules. If broker has assets, you don't needed to sell it within few days. It will be credited to your account as a loan from broker

ssb · 3 Re: New Rules for credit Wed Aug 17, 2011 3:20 pm

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@fair investor wrote:

@ssb wrote:any one know what is basic rules for credit ,
did T+5 change to T+15
that mean i buy on 1st day i have to pay before 16th day
please explain

No more T+ rules. If broker has assets, you don't needed to sell it within few days. It will be credited to your account as a loan from broker

wow then when do i have to pay ????????????????

Deva · 4 Re: New Rules for credit Wed Aug 17, 2011 3:35 pm

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To my understanding there is no change in T+ rules.
Experts please comment on this topic.
Are the comments made on this topic correct?

maalinda · 5 Re: New Rules for credit Wed Aug 17, 2011 3:37 pm

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No idea wheather t + has changed or not. i guess there is no more T + 5 force selling rule...

When your broker ask you... you will have to.

it depends on your broker assets + the relationship with you and broker.

Antonym · 6 Re: New Rules for credit Wed Aug 17, 2011 3:40 pm

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As I see it: Each broker will operate differently, while adhering to the SEC notification.

Your credit limit is likely to be determined by your portfolio value and/or volume of business.
Some brokers might give 'revolving credit' - Stay within your limit and Pay within x days.
Others might give 'open credit' - Stay within your limit and pay at your convenience.
What is certain is that all brokers who meet the criteria will be able to earn good interest from their clients!

I suggest that we speak to our respective brokers and find out (a) How much is your credit limit? (b) Do you need to settle within a particular period after the transaction? (c) What rate of interest will be charged for the credit that is availed?

Please share your findings with the forum.

nkalansu · 7 Re: New Rules for credit Wed Aug 17, 2011 3:45 pm

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If nobody is going to pay and all are asking for credit then from where you get the funds? I don't think brokers can give credit forever .... and also I do not think they will make settlements T+15.....

Do you like if brokers settle T+15 when you sell your stocks....???

Well this is interesting.......Brokers settle T+3 however they give T+15 to clients....... how long can you do it.....??

Forced selling again in couple of months i think.

Hiru · 8 Re: New Rules for credit Wed Aug 17, 2011 4:02 pm

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Play with your own money while others will play with credit because you will win at the end. This is a trap created by brokers for their benefit and if you do not learn it immediately, you will have to pay the price and learn in few months.

Antonym · 9 Re: New Rules for credit Wed Aug 17, 2011 4:08 pm

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@nkalansu wrote:If nobody is going to pay and all are asking for credit then from where you get the funds? I don't think brokers can give credit forever .... and also I do not think they will make settlements T+15.....

Do you like if brokers settle T+15 when you sell your stocks....???

Well this is interesting.......Brokers settle T+3 however they give T+15 to clients....... how long can you do it.....??

Forced selling again in couple of months i think.

Credit is there in most businesses. For example, when the company which I work for wants to buy things, they frequently get it on credit - and pay within 30 or 60 days (depending on the supplier's credit terms).

The supplier provides credit upto a certain limit for us because we are important customers for them; we have been buying from them for a long time and we generally pay on time. Some customers are not given credit facilities because their volumes are either too small or their payments are too inconsistent. By following a prudent credit policy, the supplier can maximize his profits with hardly any risk.

I think broker credit will follow a similar policy.

pitbull · 10 Re: New Rules for credit Wed Aug 17, 2011 7:15 pm

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T+ Any amount f dates bt thers an interest 24% per annum. Means 2% per month

rijayasooriya · 11 Re: New Rules for credit Wed Aug 17, 2011 8:25 pm

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@fair investor wrote:

@ssb wrote:any one know what is basic rules for credit ,
did T+5 change to T+15
that mean i buy on 1st day i have to pay before 16th day
please explain

No more T+ rules. If broker has assets, you don't needed to sell it within few days. It will be credited to your account as a loan from broker

There is a some sort of loop hole here.Brokers may try to do force selling with this assets issue.They should not be allowed to give credit beyond their assets.

Guys be careful when u buy on broker's credit as SEC annoucement does not mention any guidelines.

dindon1 · 12 Re: New Rules for credit Wed Aug 17, 2011 8:39 pm

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What I understand by the mechanism followed by my broker is like this;
They let me to buy as much as I want(because I am a very good client to them)Then ,when it hit T+5 they ask me to sell.,So I sell sometimes for loss.(in recent past it was for loss most of the time)And they allow me to buy again,.some times it is a perfect day trade and when I ask to sell on the same day they will tell me this stock can start even more higher tomorrow.,,Why do they suggest that???That is merely being playing the game to attract double commission...its like if you buy and sell on the same day you will pay only half of the commission than you buy and sell in two different days.To keep the credit I play according to them.,What a dumb a#@se I am??So being such a dummy how would it effect these new rules for me??Any one can explain in simplest way??

Gaja · 13 Re: New Rules for credit Wed Aug 17, 2011 8:40 pm

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well i never care about the amount of credit given by the broker, since i do the transaction if i have money, but i feel every adviser should inform to his or her client well in advance the maximum amount they can give, the settlement period and the interest rates, who ever deals with the credit without knowing these basic things need be extra careful

Hiru · 14 Re: New Rules for credit Wed Aug 17, 2011 9:57 pm

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@dindon1 wrote:What I understand by the mechanism followed by my broker is like this;
They let me to buy as much as I want(because I am a very good client to them)Then ,when it hit T+5 they ask me to sell.,So I sell sometimes for loss.(in recent past it was for loss most of the time)And they allow me to buy again,.some times it is a perfect day trade and when I ask to sell on the same day they will tell me this stock can start even more higher tomorrow.,,Why do they suggest that???That is merely being playing the game to attract double commission...its like if you buy and sell on the same day you will pay only half of the commission than you buy and sell in two different days.To keep the credit I play according to them.,What a dumb a#@se I am??So being such a dummy how would it effect these new rules for me??Any one can explain in simplest way??

I agree this and that is why I am clearing everything and now i am going to give up my margin facility too.

bmi · 15 Re: New Rules for credit Wed Aug 17, 2011 10:53 pm

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what ever, brokers should work as a broker not like a bankers ( Recovery Branch) LOL I heard we can go upto 50% value of PF with interest if it goes more than 50% we are liable to pay or force selling will impose for the additional value, is it right, others views are appreciated in this regard

ssb · 16 Re: New Rules for credit Wed Aug 17, 2011 10:57 pm

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@dindon1 wrote:What I understand by the mechanism followed by my broker is like this;
They let me to buy as much as I want(because I am a very good client to them)Then ,when it hit T+5 they ask me to sell.,So I sell sometimes for loss.(in recent past it was for loss most of the time)And they allow me to buy again,.some times it is a perfect day trade and when I ask to sell on the same day they will tell me this stock can start even more higher tomorrow.,,Why do they suggest that???That is merely being playing the game to attract double commission...its like if you buy and sell on the same day you will pay only half of the commission than you buy and sell in two different days.To keep the credit I play according to them.,What a dumb a#@se I am??So being such a dummy how would it effect these new rules for me??Any one can explain in simplest way??

you mean brokers will milk us more with this credit present Sad

Aamiable · 17 Re: New Rules for credit Wed Aug 17, 2011 11:01 pm

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Luckily I don’t collect any thing on credit. ....not worth ...

smallville · 18 Re: New Rules for credit Thu Aug 18, 2011 1:04 am

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@ssb wrote:

@dindon1 wrote:What I understand by the mechanism followed by my broker is like this;
They let me to buy as much as I want(because I am a very good client to them)Then ,when it hit T+5 they ask me to sell.,So I sell sometimes for loss.(in recent past it was for loss most of the time)And they allow me to buy again,.some times it is a perfect day trade and when I ask to sell on the same day they will tell me this stock can start even more higher tomorrow.,,Why do they suggest that???That is merely being playing the game to attract double commission...its like if you buy and sell on the same day you will pay only half of the commission than you buy and sell in two different days.To keep the credit I play according to them.,What a dumb a#@se I am??So being such a dummy how would it effect these new rules for me??Any one can explain in simplest way??

you mean brokers will milk us more with this credit present

Always stick to the general rules.. Dont keep till it exceeds T+5, ask ur broker the amount yu'll have to pay if exceeding it in a worst case.. Ten calculate the profit/loss and decide what to do..
My main advice is, dont make broker rich unnecessarily Wink

Chinwi · 19 Re: New Rules for credit Thu Aug 18, 2011 8:55 am

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From where this T+15 came ?

There is no limit like that.

If brokers manage their own assets as per the SEC guidelines they can give you credit as long as they want. They will like it because they can charge high interest from the clients.

If the owners find it lucrative they will infuse further funds to the company.
Because they can get funds at half cost. I think this may become a business like Credit cards.

( as per SEC rule an OD or loan taken by the broker company will not increase their lending power)

When they reach the margin they will either increase their assets or stop giving further credit. I do not thing they will have to force you to sell unless they manage the system badly.

http://www.sec.gov.lk/images/Directive%2016%20August%202011.jpg

Annex 1:
http://www.sec.gov.lk/images/Annexure%201%20Directive%2016%20August%202011.jpg

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New Rules for credit

1 New Rules for credit Wed Aug 17, 2011 2:54 pm

ssb

2 Re: New Rules for credit Wed Aug 17, 2011 3:07 pm

fair investor

3 Re: New Rules for credit Wed Aug 17, 2011 3:20 pm

ssb

4 Re: New Rules for credit Wed Aug 17, 2011 3:35 pm

Deva

5 Re: New Rules for credit Wed Aug 17, 2011 3:37 pm

maalinda

6 Re: New Rules for credit Wed Aug 17, 2011 3:40 pm

Antonym

7 Re: New Rules for credit Wed Aug 17, 2011 3:45 pm

nkalansu

8 Re: New Rules for credit Wed Aug 17, 2011 4:02 pm

Hiru

9 Re: New Rules for credit Wed Aug 17, 2011 4:08 pm

Antonym

10 Re: New Rules for credit Wed Aug 17, 2011 7:15 pm

pitbull

11 Re: New Rules for credit Wed Aug 17, 2011 8:25 pm

rijayasooriya

12 Re: New Rules for credit Wed Aug 17, 2011 8:39 pm

dindon1

13 Re: New Rules for credit Wed Aug 17, 2011 8:40 pm

Gaja

14 Re: New Rules for credit Wed Aug 17, 2011 9:57 pm

Hiru

15 Re: New Rules for credit Wed Aug 17, 2011 10:53 pm

bmi

16 Re: New Rules for credit Wed Aug 17, 2011 10:57 pm

ssb

17 Re: New Rules for credit Wed Aug 17, 2011 11:01 pm

Aamiable

18 Re: New Rules for credit Thu Aug 18, 2011 1:04 am

smallville

19 Re: New Rules for credit Thu Aug 18, 2011 8:55 am

Chinwi

20 Re: New Rules for credit

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