28-04-2025
SEBI tightens margin collection timelines for stock brokers in cash segment
By News Desk Published on April 28, 2025, 17:38 IST
The Securities and Exchange Board of India (SEBI) has issued a new circular mandating stock brokers and clearing members to align the collection of margins with the T+1 settlement cycle in the cash market.
Under the existing framework outlined in the Master Circular for Stock Brokers dated August 9, 2024, trading members (TMs) and clearing members (CMs) are required to mandatorily collect upfront Value at Risk (VaR) margins and Extreme Loss Margins (ELM) from their clients. Other margins were allowed to be collected within T+2 days.
Following the complete implementation of the T+1 settlement cycle from January 27, 2023, SEBI has now modified the timelines. Going forward, TMs and CMs will be required to collect all margins (except VaR and ELM) from their clients by the settlement day itself.
Key updates under the circular include: TMs and CMs must continue to collect upfront VaR margins and ELM before trade execution.
Other margins must be collected by the settlement day.
If a client completes the fund or securities pay-in by settlement day, other margins will be deemed to have been collected, and no penalty will apply.
If a client fails to make the pay-in by settlement day, and margins are not collected by then, penalties will be levied.
SEBI has directed all recognised stock exchanges and clearing corporations (excluding commodity clearing corporations) to amend their bye-laws, rules, and regulations accordingly and inform market participants.
The circular, signed by SEBI General Manager Aradhana Verma, has come into force with immediate effect.
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