SEBI Reduces Margin Collection Timeline to Settlement Day for TMs/CMs

Circular No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/57; Dated: 28.04.2025

Trading Members (TMs)/Clearing Members (CMs) are required to mandatorily collect upfront Value at Risk (VaR) margins and Extreme Loss Margin (ELM) from their clients. They currently have T+2 working days to collect these margins. With effect from January 27, 2023, the settlement cycle has been reduced from T+2 to T+1 across all scrips in the cash market.

Based on representation received from the Brokers’ Industry Standards Forum (ISF), and to ensure a stronger risk management framework, SEBI has now directed TMs/CMs to collect margins (except VaR margins and ELM) from their clients by the settlement day.

If pay-in (both funds and securities) is made by the settlement day, the other margins would be deemed to have been collected, and a penalty for short/non-collection of other margins must not arise. Further, if a client fails to make a pay-in by the settlement day and TM/CM doesn’t collect the margins, it would result in a penalty.

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