I'm trying to get this right. Not really sure about how margin facility works. Look at the subsection on T+3. If I understand what Jordy is saying, it should be something like this:
If I just strike out the above, would the statements be correct? 

> Buy stocks, margin account

- To buy shares using the margin facility, you need to have enough collateral in that account before you are allowed to buy the stocks. Your brokerage firm will charge you interest on your "borrowed" money.

> Buy stocks, cash account

- You do the trade within your credit limit. At T+3, you will need to settle your payment.

- If you do not pay up after T+3, your remisier will sell your shares, and charge you if you sustain any loss from the sell.
------- When they sell your stocks, they will sell it at whatever price traders queued to buy.
------- For example, if you bought your share at 90 cents and the highest buyer's price is 80 cents, then you stocks would be sold at 80 cents and you would incur a loss of 10 cents per share.

To avoid such a case, you could top up your trading account with cash prior to any trading. The value of your stocks will be deducted from your trading account (but you have to make sure you have sufficient cash in that account). The brokerage could pay you interest on any balance in your trading account.

Why Margin Facility?
Say a person has substantial amount of shares in an account, he/she is probably holding it for the long haul (cause they are dividend yielding stocks or probably he/she is a director of a company) probably 1 yr?

If your holding your shares, even if there is appreciation or depreciation of value in the said shares... the gain/loss is merely on paper is a person does not realize the value.

So basically if you have shares sitting in an account for a period of 1 year not re-generating any profits (execpt in the case of dividends etc..), its no different from putting your money under the pillow.

One of the unique features of Margin Facility is to allow you to utilize this shares as collateral (shares unlike properties are considered much more volatile, most commercial banks would not accept it as good collateral) after a certain haircut imposed by the Investment Bank.

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What types of Collateral are acceptable?

1. Shares (namely those permitted by Bursa, main board shares)
2. Cash
3. Though there are other collaterals which are deemed acceptable to the bank, but generally speaking the industry only accepts 1 & 2 above. (if otherwise correct me)

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The determining factor of when you can withdraw or required to top up your Margin Facility are determined by 3 Equity Ratio (I only know the %pecentage but i don't know exactly how it operates)

180% - equity ratio - allows u to withdraw surplus funds
150% - Margin Call - you can only sell at this level or top up
140% - Force sell - immediate liquidation without notice

the % if you notice may vary from those prescribed from Bursa, for the purpose of margin financing.. certain banks will impose a higher ratio to manage (off set) their clients risk.

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Last min updated:

Calcluation of Equity Ratio

ER = TMV / OS

ER= Equity Ratio
TMV = Total Market Value of Purchase + Collateral
OS = Net Outstanding Balance (ecl cash deposits)

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Fees Payable during the tenure of a Margin Facility:

Rollover interest = X% service charge on the total amount outstading of all purchases due and owing as at the date of renewal (normally a margin facility will run for 3 months)

Interest =
1. X% interest will be calculated on a daily basis to be settled monthy (end of the month)
2. Interest chargeable at the from T+4 from the date of contract for purchases.

Commitment Fee
X% based on daily unutilised facility amount to be calculated monthly

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Another Note*

You will find in some agreements that Margin Facility agreement isn't for INVESTMENT PURPOSES (long/short term), its a must have tool for Speculators (Intra day) but not Investors.

- notice the "commitment fee".

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The Con of Margin Financing is...
1. If you not using the facility its going to cost you money
2. if you leave it idle more than 30 days from the first day you opened it, the Bank will cancel ur facility
3. Only for intraday player.

Blue chips is just a general term.

There is no such thing of ABC stock is classified as blue chip while xyz stock is not.

The term general refer to high cap and quality stocks. 

There is a story of blue chips in casino refer to higher value of the chip, which the term come from or being utilised by market place.

The Con of Margin Financing is...
1. If you not using the facility its going to cost you money
2. if you leave it idle more than 30 days from the first day you opened it, the Bank will cancel ur facility
3. Only for intraday player.
1.No,some broking firms don't charge commitment fees,
2.No.most broking firms don't do this.Better still,if you have outstanding not settled,the broking firm will be very happy with you because they earn high interest from you,so you can drag on for as long as there is no margin call.
3.No,any Malaysian can apply but you must have sufficient collaterals to be pledged in.

The Con of Margin Financing is...
1. If you not using the facility its going to cost you money
2. if you leave it idle more than 30 days from the first day you opened it, the Bank will cancel ur facility
3. Only for intraday player.
1.No,some broking firms don't charge commitment fees,
2.No.most broking firms don't do this.Better still,if you have outstanding not settled,the broking firm will be very happy with you because they earn high interest from you,so you can drag on for as long as there is no margin call.
3.No,any Malaysian can apply but you must have sufficient collaterals to be pledged in.

I was looking from the perspective of my Investment Banks margin facility...

Therefore, for this purpose your feedback is absolutely relevant...

as a note of caution to those who are planning to take up margin facility...
1. Read your agreement and understand it (in and out)

Some restrictions, hidden fees and so forth may be hidden within the agreement without your knowledge (and of course excessive interest imposed)
2 & 3rd items..
It depends on the size of the bank, unlike say CIMB (which is backed by a Bank, on top of which an investment banking arm) it is possible for it to gve out credit with less stringent terms...

Smaller investment banks (stand alone especially) like ECM, Kenanga, (i think is Jupiter) may impose above and additional conditions in order to maximize return/ (in other cases make it possible for default to occur as early as possible).