Sebi eases upfront margin collection norms

Can anybody kindly confirm if SEBI has revoked the previous order regarding the T+2 settlement?

No, that is going to be implemented as planned.

This circular from SEBI, is about upfront margin (VAR + ELM) collection in cash segment, more discussion on that is on this topic No additional intraday leverages from Aug 2021 in Indian capital markets


But doesn’t this mean that brokers can allow retailers to immediately use the proceeds from selling the securities in their dmat? Or we still have to wait for T+2 day before we can use the proceeds.
It’s so confusing 🤦

@Siva can you confirm this.

This looks 10X Leverage? @siva

Not 10x, SEBI has asked brokers to collect minimum 20% upfront margin, so that works out to be leverage of 5x.

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When will the reduced 5x leverage for intraday start,from 3rd aug or 1st sep?

Will start from 1st September.

That is just an example.Min is 5 times or more if var+elm is less than 20%.

It depends on broker, if he does early payin, ie deduct shares on same day from demat then sell proceeds can be used on same day with 20% haircut.

@siva. Please clarify, Leverage reduction will be in phased manner. Though effect takes from sep 1st, Guessing depends on broker how they offer. By the end of Aug Next year it should be compeltely 5x? Right?

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No, from sep 1st it will be for equity.

is this 5x levarage applicable in FNO as well?

No, only for eq from sep1st.

@siva and what about FNO? from dec??

Maybe from oct 1st if not for sure from dec1st.

bro is zerodha can do early pay in on same day …as i have read somewhere that zerodha is working on it

i havent found anything like this on sebi official site…where u got it bro ???

we all want sebi to take this rule back …t+2 shit …is zerodha can do anything about it …so that everything work efficiently as it was working

It’s mentioned in the link that I have shared in the first post. Moreover, I also got an email from Axis securities about this issue and they also seek some more clarity from the SEBI and exchange. Here, is a copy of email-

Dear Customer,

SEBI has come up with new guidelines to further strengthen the current margin system and ensure investor interests are adequately protected. The latest SEBI circular lays guidelines for the margin requirement in Equity Cash segment and is effective from August 1, 2020. Investors will be required to maintain sufficient margins upfront with the broker before taking buy or sell positions in the Equity Cash segment.

The changes are industry-wide and overall there will only be a minor impact on your trading and investment journey as we at Axis Securities Ltd have always been compliant in levying the Exchange prescribed margins since beginning.
Important points:
While taking a new position you will be required to have upfront margins in your account either in the form of fund limits or collateral shares deposited/pledged in favour of Axis Securities Limited (ASL).

Does this impact you:
There is no change for you as of now as at Axis Securities Ltd we already collect upfront margins.

We expect more clarifications on the recent circulars from the regulators and will keep you informed on the same.

Happy investing and trading! Assuring you the best of services.

Best Regards,
Axis Securities Limited

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