SEBI Eases Margin Trading Facility Requirements and Reporting Deadlines.
11 September 2024
The Securities and Exchange Board of India (SEBI) has amended the regulations for Margin Trading Facility (MTF) as outlined in the Master Circular dated October 16, 2023. The key changes include:
1. Collateral Use: Cash collateral provided by clients can now be used as maintenance margin for MTF, provided that it is used to purchase securities which are separately identifiable and not mixed with other funds.
2. New Clause for Funded Stocks: Funded stocks can be used for maintenance margin only if they are Group 1 securities, with the margin calculated as VaR plus five times the Extreme Loss Margin, regardless of their availability in the F&O segment.
3. Reporting Deadline: Trading Members must report MTF exposure by 6:00 PM on T+1 day.
4. Implementation: Stock Exchanges are required to amend their bye-laws and inform their members about these changes, which will take effect from October 1, 2024.
These adjustments aim to ease the collateral burden on investors and enhance the ease of doing business in the securities market.