Sebi Eases Margin Trading Rules: Key Changes
By Rediff Money Desk, New Delhi Sep 11, 2024 18:45
Sebi has relaxed margin trading facility rules, allowing securities funded through cash collateral to be considered as maintenance margin. This move aims to promote ease of doing business and reduce collateral burden.

New Delhi, Sep 11 (PTI) To promote ease of doing business, markets regulator Sebi on Wednesday allowed securities funded through cash collateral to be considered as maintenance margin for margin trading facility (MTF).
The move will also help alleviate the burden of additional collateral towards the maintenance margin for the margin trading facility.
The development took place after the Securities and Exchange Board of India (Sebi) received representations from market participants through the Industry Standards Forum (ISF) to relax the requirement pertaining to the margin trading facility.
In a circular, Sebi said stocks or units of equity exchange-traded fund (ETFs) deposited as collateral with the brokers and those purchased using margin trading must be kept separate. There should be no mixing of these two types for calculating the funding amount.
"In case the broker has collected cash collateral from the client in the form of margin for availing margin trading facility and the trading member has given the said cash collateral to the Clearing Corporation (CC) towards settlement obligation of the said client, then the same can be considered as maintenance margin," Sebi said.
If a broker collects cash collateral from a client and uses it to meet settlement obligations with the Clearing Corporation the resulting securities received from CC can be considered as maintenance margin. These securities must be pledged in favour of the broker.
Sebi said if funded stocks are used as maintenance margin based on cash collateral provided by the client, the funded stocks must be from Group 1 securities. The margin for these stocks will be Value at Risk (VaR) plus five times the Extreme Loss Margin, irrespective of whether they are available in the Futures & Options (F&O) segment.
Additionally, the regulator has asked trading members to report their exposure under MTF by 6:00 PM on T+1 day (the day after the trade date).
The move will also help alleviate the burden of additional collateral towards the maintenance margin for the margin trading facility.
The development took place after the Securities and Exchange Board of India (Sebi) received representations from market participants through the Industry Standards Forum (ISF) to relax the requirement pertaining to the margin trading facility.
In a circular, Sebi said stocks or units of equity exchange-traded fund (ETFs) deposited as collateral with the brokers and those purchased using margin trading must be kept separate. There should be no mixing of these two types for calculating the funding amount.
"In case the broker has collected cash collateral from the client in the form of margin for availing margin trading facility and the trading member has given the said cash collateral to the Clearing Corporation (CC) towards settlement obligation of the said client, then the same can be considered as maintenance margin," Sebi said.
If a broker collects cash collateral from a client and uses it to meet settlement obligations with the Clearing Corporation the resulting securities received from CC can be considered as maintenance margin. These securities must be pledged in favour of the broker.
Sebi said if funded stocks are used as maintenance margin based on cash collateral provided by the client, the funded stocks must be from Group 1 securities. The margin for these stocks will be Value at Risk (VaR) plus five times the Extreme Loss Margin, irrespective of whether they are available in the Futures & Options (F&O) segment.
Additionally, the regulator has asked trading members to report their exposure under MTF by 6:00 PM on T+1 day (the day after the trade date).
Source: PTI
Read More On:
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
You May Like To Read
TODAY'S MOST TRADED COMPANIES
- Company Name
- Price
- Volume
- Srestha Finvest
- 0.52 ( -8.77)
- 55285518
- Vodafone Idea L
- 8.07 ( -2.42)
- 34584307
- G G Engineering
- 1.04 ( -1.89)
- 10071638
- Standard Capital
- 0.79 ( 0.00)
- 9971293
- YES Bank Ltd.
- 17.46 ( -1.19)
- 9343371
MORE NEWS

Infosys Postpones Trainee Assessments by a Week
Infosys has deferred internal assessments for trainees by a week amid recent layoffs of...

Noida Airport Partners with Kyndryl for Tech...
Noida International Airport has partnered with Kyndryl to manage its technology...
ASCI Flags 413 Offshore Betting Ads in 2025
The Advertising Standards Council of India (ASCI) flagged 413 offshore betting ads to...