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Our Bureau

Mumbai , March 4

ALL securities which are offered in the initial public offerings and meet the conditions for inclusion in the derivatives segment of the stock exchanges would now be eligible for margin trading facility, according to a Securities and Exchange board of India circular.

Also, before providing margin trading facility to a client who has already availed himself of the facility from another broker, the broker is required to obtain a no-objection certificate in writing from the other broker. The other broker is required to convey his objection, if any, within a period of 21 days from the date of receipt of the query. If there is no response, the broker will be free to provide margin trading facility to the client.

Fixed deposits with banks as well as bank guarantees will be treated as cash equivalent and will be considered acceptable form of initial and maintenance margins, the circular said.

The circular also said that Clearing Corporation could borrow securities from any person through his account with the depository participant and select the borrower on a random basis. This is expected to enable lending of idle securities by investors.

Clearing Corporation would work out a mechanism to borrow securities at a market-determined rate.

Stock exchanges have been advised to make necessary changes to their byelaws to incorporate this and communicate the status of the implementation to SEBI through the monthly development report.

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