The Hindu Business Line : SEBI to solve problems related to margins: Bhave

(From left) Mr Ravi Narain, Managing Director and CEO, NSE; Mr C.B. Bhave, Chairman, SEBI; and Mr Ravi Parthasarathy, Chairman, IL &FS, at a workshop on India–Hong Kong Financial Sector Co-operation on Monday.

Our Bureau

Mumbai, April 7 The Securities and Exchange Board of India (SEBI) on Monday said that it was prepared to hear the problems related to margins in cash transactions to be introduced for institutional investors with effect from April 21. FIIs and custodians have requested a meeting with the regulator in this regard.

“The FIIs and the custodians (CDSL & NSDL) have requested a meeting with us, we will certainly meet all institutions who have any kind of difficulty…we will be happy to solve the problems,” said Mr C.B. Bhave, Chairman, SEBI, while talking to presspersons on the sidelines of a workshop on India–Hong Kong Financial Sector Co-operation.

Mr Bhave was replying to a question on whether SEBI was going to offer any kind of relaxation on the collaterals that the FIIs can keep and whether they can keep shares as collaterals under the margining.

Institutional investors will have to pay margin amount on their share transactions in the cash segment from April 21, in the same way as applicable to other investors. SEBI had issued a circular regarding this last month.

From April 21, the margining requirements will be on T+1 basis and subsequently from June 16, the collection of margins would move to an upfront basis.

Currently, margin payment in cash transactions is applicable to retail investors and to those who do proprietary trading. It is a percentage of the value of the stocks that investors have to pay upfront upon placing their order with their brokers.

NSE ready

Meanwhile, the NSE on Monday said that it was geared up for margining for institutional investors. “We are ready for the introduction of margins,” said Mr Ravi Narain, Managing Director and CEO, National Stock Exchange of India, while talking to presspersons on the sidelines of the workshop.

Earlier addressing the workshop, which discussed cross listing of depository receipts, Mr Bhave said, “The SEBI regulations for Indian Depository Receipts (IDRs) have been out for some time but hasn’t seen any response and therefore one thing that I want to assure you that the deliberations and suggestions from this workshop will receive very serious attention at SEBI.”

“The US market and European markets are making serious efforts for cross listing, similarly cross listing between Hong Kong and Mumbai that is being deliberated upon here will benefit, both the markets,” he said.

So far, there was no response to IDRs for which regulations were framed in 2004 and they had been simplified further last year. One of the delegates at the workshop said that IDRs need to be aggressively marketed in the foreign countries.

Mr Ravi Kapoor, Managing Director, Citigroup, said that companies from country such as Bangladesh, which had a sizable market cap of around $8 billion should be invited to the Indian market.

Talking about the expectations of innovations in the capital markets by market participants, a position that he held before becoming SEBI Chairman, Mr Bhave said, “A regulator tries to minimise the risk in the market while the market player try to take risk, the worry in the regulator’s mind is whether these risks that you are taking are at the cost of some body else.”

More Stories on : Regulatory Bodies & Rulings | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page