Thu Sep 12 06:35:57 UTC 2024: ## SEBI Eases Margin Trading Requirements for Businesses in India

**Mumbai, India (September 12, 2024):** In a move to facilitate smoother business transactions, the Securities and Exchange Board of India (SEBI) has relaxed margin requirements for the Margin Trading Facility (MTF). This decision follows requests from market participants through the Industry Standards Forum (ISF) for a more flexible approach.

SEBI now allows securities funded through cash collateral to be counted as margin for the MTF. This means businesses will no longer need to provide additional collateral for maintenance margin, easing the financial burden.

To ensure transparency, SEBI mandates that securities deposited as collateral with brokers and those acquired through margin trading must be kept separate. The regulator also clarifies that if a broker utilizes client-provided cash collateral for settlement obligations with the Clearing Corporation, the resulting securities can be considered maintenance margin and must be pledged in favor of the broker.

Further, SEBI specifies that funded stocks used as maintenance margin must be from Group 1 securities, and their margin will be calculated based on Value at Risk (VaR) plus five times the Extreme Loss Margin, regardless of their availability in the Futures & Options (F&O) segment.

Finally, SEBI has instructed trading participants to report their exposure to the MTF by 6 p.m. on day T+1 (the day after the trade date). This new regulation is expected to encourage increased participation in the MTF and contribute to a more dynamic Indian securities market.

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