Decisions of Group on Risk Management for Equity Markets
Summary
SEBI mandated that Mark to Market Margin be collected separately from daily exposure margin. Stock Exchanges were required to modify their software to enforce client code identification for gross margining within three months. All clients, excluding specific financial institutions, must maintain a minimum margin deposit of 10% of their net open position.
Text
Mark to Market Margin shall be collected separately from daily/exposure margin as the purpose of these margins is different.
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.
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.
The Exchanges shall disclose the daily net open position of top 500 scrips.
Source: SecMarx — Decisions of Group on Risk Management for Equity Markets. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.