The Securities Exchange Board of India(SEBI) in its Notification dated 29th November 2019 has issued circular on cut-off time for the collection of margins from commodities traders that are traded beyond banking hours. The directive will be effective from April 1, 2020.
The collection of current report margins from the clients in case of clearing corporations which was till the End of Day (EOD), the cut-off time for the purpose of determining minimum threshold of margins to be collected by members from their clients has been made up to 5:00 pm. Further for commodity derivative contracts having trading till 5:00 PM, margin collection from clients shall be on EOD basis.
SEBI stated that the Risk Parameter File (RPF) to be generated at cut-off time shall be applied on clients’ EOD portfolio for the purpose of determining minimum threshold of margin to be collected from clients by members. Similarly for the purpose of determining minimum threshold of Extreme Loss Margin (ELM) to be collected from clients, EOD client portfolio shall be valued at the half hour weighted average trade price at the cut-off time of 5:00 pm.
SEBI further clarified that there shall not by any change in norms regarding margin computation and collection by the clearing corporations from its members.
Click here to read the Notification.
