Introduction:
The Securities and Exchange Board of India (hereinafter referred as ‘SEBI’) vide circular[1] dated May 02, 2018, has specified certain additional risk management measures that are required to be complied with and implemented by the stock exchanges/ clearing corporations for the derivatives segment. The circular came into effect on June 01, 2018.
Margin Collection and Enforcement Requirement:
SEBI has specified the mandate for the equity derivatives segment that the following shall be included in the client margins which shall be collected and reported by the trading members to the Stock Exchange, and by clearing members to the Clearing Corporation:
- initial margin;
- exposure margin/ extreme loss margin;
- calendar spread margin; and
- mark to market settlements.
Further,…
