Sebi Eases Margin Trading Rules to Boost Market Flexibility

Sebi has announced a new rule allowing securities funded through cash collateral to be considered as maintenance margin for margin trading facilities (MTF). The move comes after representations from market participants and aims to reduce the additional collateral burden. Other stipulations include separation of stock types and mandatory reporting.

Sebi has taken a significant step to ease market operations by allowing securities funded through cash collateral to be considered as maintenance margin for margin trading facilities (MTF).

This move is expected to alleviate the need for additional collateral, thereby lightening the financial load on traders.

The regulator, responding to concerns raised by market participants, also mandated that stocks or units of equity ETFs deposited as collateral should remain separate from those purchased using margin trading, with stringent guidelines for reporting and collateral management.