Is this a joke by SEBI?

[Mehdi_Abbas]

Some people will say our stock market has no liquidity no active traders, whom should we blame?

[siva]

@kiranf

Is this requirement inline with zerodha’s current margin policy. I mean 12.5x for top lower volatility stocks and then higher margins based on volatility of instrument. Does it have any impact on current margin policies of stock brokers like Zerodha?

Leverage will reduce if this circular comes into effect. May be 7 to 8 times one can get intraday leverage on stocks.

[siva]

@99Bulls

Aren’t we keeping sufficient margin money while taking an intraday trade in Cash & FNO in Zerodha?
Or SEBI wants something else/more?

Few brokers are giving upto 40 times leverage and that is the real problem, in many developed economies leverage is also controlled, I personally believe in a way this is a good initiative for long term stability.

[Riyas_Ahamed]

@siva, any good news we can expect from SEBI for hedged trades , ETA can expect

[siva]

@Riyas_Ahamed

any good news we can expect from SEBI for hedged trades , ETA can expect

It will announce but no idea on timeline.

[nithin]

@99Bulls

Aren’t we keeping sufficient margin money while taking an intraday trade in Cash & FNO in Zerodha?
Or SEBI wants something else/more?

At Zerodha we dont’ allow clients to trade without margins, but the story isn’t the same with other brokers, especially a lot of small to mid-sized ones. I don’t think our clients will be really affected with this.

[vikas1989]

What will be difference between MIS and BO/CO in terms of leverage once this is implemented?

[siva]

If this is implemented then max leverage can’t be more than 7 to 8 times, both in MIS and BO or infact on any intraday product with any broker, but this is little grey area, need to await for few more details.

[vikas1989]

When zerodha will confirm the new margins? As this will come to effect from 1st Jan 2020

[siva]

Awaiting more details on this, once it is out we will inform all our clients.

[p699]

[siva]

I think these are not reported correctly, need to wait for few more days to get clarity.

[ShubhS9]

This is good to hear. Though, will leverage for BO - CO orders reduce when this rule comes into effect?

[siva]

@ShubhS9

Though, will leverage for BO - CO orders reduce when this rule comes into effect?

May not be.

[vikas1989]

@siva

May not be.

@siva here you are saying BO/CO leverage may not be reduced.

In one of reply in this post you told that BO/CO leverage will come down to 7to8 times.

Please clarify

[siva]

@vikas1989

here you are saying BO/CO leverage may not be reduced.

In one of reply in this post you told that BO/CO leverage will come down to 7to8 times.

Please clarify

Ideally in the spirit of circular it means leverages should come down, but reporting happens at end of the day so it is similar to fno for which both span and exposure is required to initiate and carry forward position but broker fund for intraday. Hence I said it is grey area and few more clarifications are awaited, once everything is clear, Nithin will write a blog explaining the circular in detail, please give it couple more days to get more clarity.

[p699]

@nithin

So yeah, the above circular will only clean up the system and will most likely make no difference to the life of any retail equity investor/trader.

How does the SEBI circular on collection and reporting of margins in cash segment from Jan 1st 2020 affect me?

Let me start off with first explaining why SEBI may have put in this rule in place to collect margins from customers and report to exchanges. Over the last couple of years, especially after the financial frauds at a few brokerage firms, SEBI has been working hard to fix a legacy issue of the broking industry which was a loophole that got misused by these firms. This is essentially a way to use one client’s balance (cash or margin from pledging securities) for another client, or by the brokerage…

@Bhuvan How to close this thread, since Nithin has answered this issue in another thread ?

[Bhuvan]

Shouldn’t be an issue now that you’ve posted the link at the end

[coolraj79]

can anyone confirm the exact rule now? we hold some shares in cash delivery since many months, do i have to maintain margins against that?

[siva]

As of now nothing changes, will let all know if anything changes.