SEBI Allows Securities Funded by Cash Collateral to Be Considered as Maintenance Margin for Margin Trading Facility
- Blog|News|Company Law|
- < 1 minute
- By Taxmann
- |
- Last Updated on 13 September, 2024
Circular No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2024/118; Dated: 11.09.2024
SEBI has allowed securities funded by cash collateral to be considered as maintenance margin for Margin Trading Facility (MTF) to promote ease of doing business. This move helps to ease the burden of providing additional collateral towards the maintenance margin for the margin trading facility.
This change came after SEBI received representations from market participants through the Industry Standards Forum (ISF) to relax the margin trading requirements.
Further, stocks or units of equity exchange-traded funds (ETFs) deposited as collateral with brokers and those purchased using margin trading must be kept separate. These two types should not be mixed to calculate the funding amount.
In case, the broker has collected cash collateral from the client in the form of a margin for availing margin trading facility and the Trading Member has given the said cash collateral to the Clearing Corporation (CC) towards the settlement obligation of the said client, then the same can be considered as maintenance margin. The circular shall come into effect from October 1, 2024.
Click Here To Read The Full Circular
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied