What is the restriction on buying back the same stock under MTF after selling it from Demat holdings?

What is the restriction on buying back the same stock under MTF after selling it from Demat holdings?

1. What is this restriction about?
If a client sells shares from their Demat holdings, they will not be allowed to buy back the same stock under MTF (Margin Trading Facility) on the same trading day.
2. Why is this restriction implemented?
This restriction is implemented to:
  • Prevent misuse of leverage by converting delivery holdings into funded positions.
  • Reduce settlement and funding risks associated with MTF transactions.
3. Does this restriction apply to all buy orders?
No.
The restriction applies only to MTF buy orders of the same stock that was sold from Demat holdings on the same day.
  • ✅ Cash/Delivery (CNC) Buy – Allowed
  • ❌ MTF Buy – Not allowed (same stock, same day)
4. Is the restriction applicable if I sell MTF holdings?
No, This restriction applies only when shares are sold from Demat holdings.
5. Can I buy the same stock under MTF on the next trading day?
Yes.
You can place an MTF buy order from the next trading day onwards, subject to:
  • Stock being eligible for MTF
  • Available margin and RMS checks
6. Does this apply to partial quantity sales?
Yes. Even if you sell part of your Demat holding, MTF buy for the same stock will be restricted for that trading day.
7. How will I know if my MTF order is restricted?
If you attempt to place an MTF buy order for a restricted stock:
The order will be rejected, and Rejection Reason will be stated as "Order Rejected by RMS Only delivery buy allowed as you have a delivery sell in this stock today."
8. Is this restriction applicable across all exchanges?
Yes, The restriction applies irrespective of the exchange (NSE/BSE).
9. Does this rule apply to intraday trades?
No. Intraday (MIS) trades are not covered under this rule. The restriction is specific to MTF buy orders after selling from Demat holdings.
10. Who should I contact for further clarification?
For any queries or assistance, please reach out to:
Call our Customer Support @ 8976689766 or Email us at support@5paisa.com

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