Commodity and capital market regulator SEBI has fixed 5 pm as the cut-off time for determining the minimum threshold of margin to be collected from clients by members. The new norms will come into effect from April 1, it said.

SEBI said it has received feedback from the market participants that members currently report margins collected from their clients to clearing corporations on the basis of the End of Day (EOD) Risk Parameters File generated by the clearing corporation. However, in the case of commodity derivative products that are traded beyond 5 pm, members face difficulty in collecting the initial margin and extreme loss margin from their respective clients as the final margin requirements are crystallised at EOD, which is beyond banking hours, it added.

For commodities being traded beyond 5 pm, SEBI has directed members to generate the risk parameter file on the client’s EOD portfolio and fix the margin accordingly.

Similarly, for the purpose of determining the client’s minimum threshold of extreme loss margin, members should collect the EOD portfolio from clients and value it at the half-an-hour weighted average trade price arrived at cut-off time, it added.

However, it said, for commodity derivative contracts having trading till 5 pm, margin collection from clients will be on an EOD basis.