The Hindu Business Line : Market margin: SEBI may offer choice of payment

THE Securities and Exchange Board of India may offer a choice of payment of market margin/settlements either before or during trading, the next day. If payment is not made before trading the next day, higher initial margin would be collected from the members.

In order to align the collateral requirements in the cash market and the derivative market, the SEBI has been decided that units of money market mutual funds and units of gilt funds may be accepted towards cash equivalent component of the liquid assets of a clearing member. Equity securities can be accepted towards liquid assets in the derivative markets and units of all mutual funds can also be accepted as the securities component of liquid assets.

The market wide limit of open position (in terms of the number of underlying stock) on futures and option contracts on a particular underlying stock has now been defined as lower of either 30 times the average number of shares traded daily, during the previous calendar month, or 20 per cent of the number of shares held by non-promoters in the relevant underlying security.

"This limit would be applicable on all open positions in all futures and option contracts on a particular underlying stock," states the circular.

Also, the trading member position limits in equity index option contracts is now the higher of Rs 250 crore or 15 per cent of the total open interest in the market in equity index option contracts.

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