SEBI issues Circular on Collection and Reporting of Margins by Trading Member and Clearing Member in Cash Segment

Jul 31, 2020 | by Avantis RegTech Legal Research Team


Secretarial Compliance

The Securities and Exchange Board of India (SEBI) on July 31, 2020 has issued Circular with regard to collection of margins by Trading Member (TM) or Clearing Member (CM) in Cash Segment. SEBI had issued guidelines on short-collection or non-collection of margins by Trading Member (TM) or Clearing Member (CM) vide Circular No. CIR/HO/MIRSD/DOP/CIR/P/2019/139 dated November 19, 2019.

Based on the representations from investors, TMs or CMs, stock-broker associations, the penalty provision for short-collection or non-collection of upfront margin in cash segment shall be implemented with effect from September 01, 2020. It is further decided that if TM or CM collects minimum 20% upfront margin in lieu of VaR and ELM from the client, then penalty for short-collection or non-collection of margin shall not be applicable. However, it is reiterated that Clearing Corporation shall continue to collect the upfront margin from the TM or CM based on VaR and ELM.

[SEBI Circular No. SEBI/HO/MIRSD/DOP/CIR/P/2020/146]


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