Mumbai: The Securities and Exchange Board of India (SEBI) on Thursday introduced a revised framework under which clearing corporations will not collect margins on a client's subsequent positions in the cash segment up to the value of securities for which an early pay-in (EPI) request has been successfully accepted, IANS reported.
Source: IANS via NewKerala — SEBI eases margin rules for investors using early pay-in
The relief is aimed at investors who have a net sell obligation in a settlement and have completed the EPI process through the clearing corporation. In its circular, SEBI said margins will not be collected from the trading member or clearing member on the client's subsequent cash-market positions up to the amount covered by the accepted EPI, according to IANS.
Source: IANS via NewKerala — SEBI eases margin rules for investors using early pay-in
Clearing corporations will calculate the available EPI value on the trade date, and the value eligible for the margin benefit will be the lower of the value of securities for which EPI has been made and the value of securities actually sold by the client. When clients take fresh positions on the same day using the benefit, clearing corporations will assess the available margin after adjusting the eligible EPI value, NationPress reported.
Source: NationPress — SEBI eases margin rules for early pay-in users
SEBI clarified that if a client squares off the sale position against which the EPI benefit was availed, the benefit will be withdrawn, and any margin shortfall will be blocked from the proprietary collateral of the trading member or clearing member. The regulator said the move follows proposals from the Broker Investor Service Fund, recommendations of its Risk Management Review Committee, and internal deliberations, IANS reported. Sources: IANS via NewKerala, and NationPress.
Source: IANS via NewKerala — SEBI eases margin rules for investors using early pay-in
What changed: no margin collection on subsequent cash-segment positions up to the accepted early pay-in value for clients with a net sell obligation. Cap: the lower of the EPI securities value and the value actually sold. If the sale is squared off, the benefit is withdrawn and any shortfall is blocked from the member's proprietary collateral.