The Securities Exchange Board of India (SEBI) on September 11, 2024, issued a notification regarding allowing securities funded through cash collateral as maintenance margin for the Margin Trading Facility (MTF).
The following has been stated namely: -
• In order to promote the objective of ‘Ease of Doing Business’, the requirement under Chapter 1 at Para 4.3.3.1 of the Master Circular (Stock Exchanges and Clearing Corporations) dated October 16, 2023, shall be amended.
• Further, a new Clause 4.3.3.5 shall be included in the circular – “In case the funded stock is considered towards maintenance margin to the extent of cash collateral provided by the client, the Trading Members shall ensure that the funded stock considered is under Group 1 securities. The applicable margin shall be VaR + 5 times the Extreme Loss Margin, irrespective of whether the funded stock is available in the F&O segment or not.”
• The extant Clause 4.8.1. of the circular is modified to allow reporting of exposure under Margin Trading Facility by the Trading Members on or before 6:00 PM on T+1 day.
• The shall come into effect from October 01, 2024.
[Circular no. - SEBI/HO/MRD/MRD-PoD-2/P/CIR/2024/118]
