EoD margin collection in derivatives segments shall be based on fixed BoD margin: SEBI

Circular No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2023/016, Dated 01.02.2023

Earlier, SEBI vide circular no. dated July 20, 2020 prescribed the framework to enable verification of upfront collection of margins from clients in the cash and derivatives segment. Thereafter, the SEBI modified the framework and specified that the margin requirements for the intra-day snapshots, in derivatives segments (including commodity derivatives), shall be calculated based on the fixed Beginning of Day (BOD) margin parameters.

However, no change was specified in the methodology of determination and collection of End of Day (EOD) margin obligation of the client. Various representations were received from market participants and stakeholders, regarding the same.

Accordingly, the SEBI has decided that End of Day (EOD) margin collection requirements from clients, in derivatives segments, shall also be calculated based on the fixed Beginning of Day (BOD) margin parameters.

Further, SEBI has clarified that the above-mentioned change is only for the purpose of verification of upfront collection of margins from clients. The circular shall be effective within 3 months from the issue date.

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