IND SEBI Cross Margin Benefits Decision

On Apr. 23, IND SEBI issued circular regarding cross margin benefits.

  • IND SEBI decided to extend cross margin benefit on offsetting positions, in index and constituent stock futures, in correlated equity indices, with different expiry dates.
  • This extension is conditional on a number of matters set out within the circular.
  • Circular was issued under Securities and Exchange Board of India act 1992.
  • One of the circular's aims is to protect the interests of investors in securities.
  • Follows IND SEBI Oct. 2023 issued master circular for stock exchanges, see #188261.
  • Conditions
  • Decided to extend cross margin benefit on offsetting positions of different expiry dates.
  • Spread margin of 40% would be levied for offsetting positions in correlated indices of different expiry dates; spread margin of 30% would be levied for same expiry dates.
  • Spread margin of 35% would be levied in the case of offsetting positions in index and its constituents having a expiry date that is different from that of the index.
  • Spread margin benefit will be revoked at start of expiry day of position that expires first; exchanges and clearing corporations must keep track of cross margin activities.
  • All other requirements pertaining to cross margin remain unchanged and applicable.
  • Effectiveness
  • The circular will be effective 3 months from its date of issuance, i.e. Jul. 23, 2024.

Regulators IND SEBI
Entity Types B/D; Exch
Reference Cir SEBI/HO/MRD/TPD-1/P/CIR/2024/24, 4/23/2024
Functions Compliance; Legal; Risk; Settlement; Trading
Countries India
Products Clearing; Derivatives; Futures; Securities
Regions AP
Rule Type Final
Rule Date 4/23/2024
Effective Date 7/23/2024
Rule Id 209591
Linked to Rule :188261
Reg. Last Update 4/23/2024
Report Section International

Last substantive update on 04/25/2024