The Securities and Exchange Board of India (SEBI) on February 01, 2023, issued a circular regarding changes to the Framework to Enable Verification of Upfront Collection of Margins from Clients in Cash and Derivatives segments.
The SEBI, vide circular SEBI/HO/MRD2/DCAP/CIR/P/2020/127 dated July 20, 2020, prescribed the framework to enable verification of upfront collection of margins from clients in cash and derivatives segments and further SEBI, vide circular SEBI/HO/CDMRD/CDMRD_DRM/P/CIR/2021/689 dated December 16, 2021, inter alia, modified the aforesaid framework, providing for additional snapshots for commodity derivatives segment and Subsequently, SEBI, vide circular SEBI/HO/MRD2/DCAP/P/CIR/2022/60 dated May 10, 2022, inter-alia, modified the aforesaid framework specifying that the margin requirements to be considered for the intra-day snapshots, in derivatives segments (including commodity derivatives), shall be calculated based on the fixed Beginning of Day (BOD) margin parameters.
The Exchange has received representations from market participants and based on deliberations with various stakeholders, it has now been decided that EOD margin collection requirement from clients, in derivatives segments (including commodity derivatives), shall also be calculated based on the fixed BOD margin parameters.
In view of the above, it is clarified that the above-mentioned change is only for the purpose of verification of upfront collection of margins from clients. The margin parameters applicable for the collection of margin obligation by Clearing Corporations shall continue to be updated intra-day and EOD, as per the extant provisions.
It is to be noted that all other provisions of the said SEBI circulars dated July 20, 2020, December 16, 2021, and May 10, 2022, shall continue to remain applicable.
[Notification No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2023/016]
