I don’t know why you think I am against the leverage,
We have the largest community of retail traders, we will probably be the most affected brokerage in terms of revenue. But if you go through the explanation above, there is no real way to oppose it, is it? Also once it is put out as a rule, the penalty for breaking rules for brokerage firms is quite high. Us discussing it openly is atleast getting all brokers to put an effort to see if the rule can be changed. Keeping quiet isn’t a solution, it would eventually end up being stopped without anyone getting a chance to protest.
One of the things that SEBI has done with the recent circular on margin collection and through this clarification from the exchanges is to ensure that a client can only trade with his/her own funds only to the extent allowed. Forget other client funds, but the broker can’t put his own funds to fund the client as well. Maybe the broker should be allowed to intraday fund using their own capital if they are ready to take the risk and that is something we have been asking for. But this requires changes in derivative product design at SEBI, which is extremely tough, especially in an environment where the industry is hurting due to regulatory pressure after the incidents at Karvy and BMA. Hopefully we will soon have the good news of margin requirement dropping drastically for F&O positions that hedge each other.
We are fighting to have some sort of leverage, but keeping quiet about it like other brokers isn’t the right thing to do. I use our competitor’s products. The better product will eventually win, I don’t think businesses can hide behind regulatory arbitrages for too long. So yeah, we are also working to make sure our products can stay ahead of the competition.