Business Daily from THE HINDU group of publications
Friday, Apr 18, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Friday, Apr 18, 2008 ePaper | Mobile/PDA Version | Audio |
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Regulatory Bodies & Rulings Markets - Stock Markets Our Bureau Mumbai, April 17 Institutional clients can maintain their entire margin in the form of approved securities with appropriate haircuts (which means appropriately discounted to market value), said SEBI in a circular to the stock exchanges. This is in the context of SEBI recently mandating margining for cash transactions for institutions; this was earlier mandatory only for retail investors. The regulator said this was being done to create a level playing field for both categories of investors. While domestic institutions can offer cash, cash equivalents or securities, FIIs can offer only cash or cash equivalents such as deposits, because of RBI regulations, said an analyst. In cases where early pay-in of funds is made by members (of exchanges), the outstanding position to the extent of early pay-in shall not be considered for computing the margin obligations, said SEBI. Pay-in means payment liabilities as a result of earlier days’ trades. If an institution is clearing a settlement obligation on the T+1 day, then no margin is required, said the analyst. When the margin is paid in cash at T+1 settlement time, then only the net margin would have to be paid. This would not be applicable in the case of payment by cash equivalents. Domestic institutions can also offer client securities as collateral. More Stories on : Regulatory Bodies & Rulings | Stock Markets | Financial Institutions
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