SEBI/HO/MRD/MRD - PoD - 2/P/CIR/2024/118 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR SEBI/HO/MRD/MRD - PoD - 2/P/CIR/2024/118 September 11 , 2024 To All recognised Stock Exchanges Sir/ Madam, Sub: Allowing securities funded through cash collateral as maintenance margin for Margin Trading Facility (MTF). SEBI has received representations from market participants through the Industry Standards Forum (ISF) to relax the requirement, under Chapter 1 at Para 4.3.3.1 of the Master Circular (Stock Exchanges and Clearing Corporations) dated October 16, 2023, allowing securities funded through cash collateral to be considered as maintenance margin for Margin Trading Facility (MTF). Upon examination of the representations received, discussions were held with Stock Exchanges and representatives of the Brokers' Associations and ISF. Pursuant to the same, in the interest of investors and to alleviate the burden of additional collateral towards maintenance margin for MTF and in order to promote the objective of 'Ease of Doing Business' , the requirement under Chapter 1 at Para 4.3.3.1 of the Master Circular (Stock Exchanges and Clearing Corporations) dated October 16, 2023 stands amended as under: "The stocks or units of Equity ETFs deposited as collateral with the stock broker for availing margin trading facility (Collaterals) and the stocks or units of Equity ETFs purchased under the margin trading facility ('Funded stocks') shall be identifiable separately and no comingling shall be permitted for the purpose of computing funding amount. Further, in case the broker has collected cash collateral from the client in form of margin for availing margin trading facility and the Trading Member has given the said cash collateral to the Clearing Corporation (CC) towards settlement obligation of the said client, then same can be considered as maintenance margin to th