Capital markets regulator Sebi on Tuesday issued a framework for calculating margin necessities to be thought of for the intra-day snapshots within the derivatives segments.
The new framework will come into impact from August 1, the Securities and Exchange Board of India (Sebi) mentioned in a round.
“It has been decided that the margin requirements to be considered for the intra-day snapshots, in derivatives segments (including commodity derivatives), shall be calculated based on the fixed Beginning of Day (BOD) margin parameters,” the regulator mentioned.
The resolution has been taken after contemplating representations obtained from market members and based mostly on deliberations with varied stakeholders.
The BOD margin parameters would come with all SPAN margin parameters in addition to Extreme Loss Margin (ELM) necessities.
Sebi clarified that the change is just for the aim of verification of upfront assortment of margins from shoppers.
There might be no change in methodology of willpower and assortment of End of Day (EOD) margin obligation of the consumer.
Also, there might be no change within the provisions referring to assortment and reporting of margins in money phase.
The margin parameter relevant for assortment of margin obligation by clearing companies will proceed to be up to date intra-day, as per the round.
In July 2020, Sebi got here out with a framework that required clearing companies to ship snapshots of client-wise margin requirement to buying and selling members or clearing members for them to know the intra-day margin requirement per consumer in every phase.
Source: www.financialexpress.com”