SEBI extends new margin norms till 26 November

The Covid-19 pandemic has not only shaken the global stock markets but has also heightened volatility in the Indian stock markets. Additionally, there have been concerns about the economic slowdown.

From a risk management standpoint, SEBI has taken appropriate measures to ensure that the settlement cycles of Indian stock exchanges/clearing corporations go on undisturbed.

Along with this, the market regulator has also prescribed margin-related norms for Non-F&O Stocks in the Cash Market. These measures were made effective from 23 March 2020 and would continue to remain in force till 26 November 2020.

This move aims to protect the investors’ interest, ensure orderly trading & settlement, effective risk management, price discovery, and maintain market integrity.

Given below is the detailed description of the margin requirements:

1. The minimum margin rate for stocks, that are in the price band of 20% and have witnessed an intraday (high-low) price movement of more than 10% for 3 or more days in the past 1 month, shall be increased as follows:

• 40% or Max intraday high-low variation (during the last 1 month), whichever is higher, to be effective from March 30, 2020

2. The above margin rates may be applicable till 26 November 2020.