Sebi reviews margin framework for cash, derivatives segments
   Date :25-Feb-2020

Sebi _1  H x W:
Business Bureau :
MARKETS regulator Sebi on Monday reviewed the margin framework for cash and derivatives segments, in order to bring more efficiency in the risk management system. The move has been taken to keep pace with the changing market dynamics and to bring more efficiency in the risk management framework. The framework, which has been prepared in consultation with the capital markets regulator's Risk Management Review Committee, will come into effect from May 1 this year, the Securities and Exchange Board of India (Sebi) said in a circular. Margin, in market parlance, is the minimum fund or security an investor is required to pay to the stock broker before executing a trade.
This is basically part of the money collected by bourses from brokerages as upfront, before giving exposure for trading in equity and commodity derivatives. With regard to margin framework for the cash market, Sebi has divided value at risk margin rates in three categories based on liquidity. In respect of margin framework for derivatives, the regulator has reviewed its guidelines on volatility calculation, scan range on price as well as volatility, calendar spread charge on various products, minimum charge on short option, extreme loss margin etc.