SMDRP/POLICY/CIR-3 3/2000

July 27, 2000

To:

The President/Executive Director/

Managing Director of all the Stock Exchanges

Dear Sir,

Online GST Certification Course by TaxGuru & MSME- Click here to Join

The Group on Risk Management for Equity Markets constituted by SEBI met on July 13, 2000, and the following decisions were taken :

A. Mark to Market Margin

Mark to Market Margin shall be collected separately from daily/exposure margin as the purpose of these margins is different. As regards netting off of mark-to-market losses against mark-to-market profit, a separate circular is being issued.

B. Gross Margins on the basis of client identification

The equity markets must move towards margining on a gross basis, hence all the exchanges are to modify their software in such a way that client code becomes mandatory at the broker level. This modification must be carried out by all the exchanges within three months from the date of this circular.

C. Margin on all trades :

All the clients excluding FIs/FIIs/MFs shall maintain a deposit of minimum margin with a broker in the form of cash, bank guarantees, FDRs or approved securities. Such margin deposit shall not be less than 10% of the net open position of a client at any point of time. Actual delivery of shares sold or actual payment made for shares bought shall be excluded from the net position.

D.Disclosure of Open Positions

The Exchanges shall disclose the daily net open position of top 500 scrips. The  list of these scrips is enclosed.

The Stock Exchanges are advised to implement these decisions immediately.

sebi press_logo Circular

More Under SEBI

Posted Under

Category : SEBI (2753)
Type : Circulars (7511) Notifications/Circulars (30306)
Tags : SEBI notifications (2117)

Leave a Reply

Your email address will not be published. Required fields are marked *