SEBI relaxes margin hike in non-F&O stocks

Our Bureau Mumbai | Updated on November 25, 2020 Published on November 25, 2020

Market regulator SEBI on Wednesday relaxed the increase in margin requirement in stocks that are outside the futures and options (F&O) segment. In March, when the Covid pandemic was at a peak and resulting in high market volatility, SEBI had hiked margin requirements even on non-F&O stocks.

For nearly nine months, SEBI had imposed an increased margin on stocks, which can move 20 per cent up or down in a day. All the stocks outside F&O are in the 20 per cent price band. In March SEBI had said that if a stock moved over 10 per cent for three or more days in the last one month, the minimum margin rate was increased on it in a phased manner from 20 per cent and higher. Normally, traders are required to pay initial margin money between 10 to 15 per cent. The increase in margin stands withdrawn, SEBI has said.

But SEBI has said that other strict measures that it had initiated in March due to Covid related market volatility still remain in full force. These include the trading range of derivative stocks and index derivatives. In March this year, India’s stock market saw one of its worst falls since the 2008 financial crisis. The Sensex and Nifty crashed by more than 35 per cent in just around a month.

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Published on November 25, 2020
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