Mumbai: The Securities and Exchange Board of India (Sebi) has waived margin requirements for trades using proceeds from sales under the early pay-in (EPI) mechanism, a move aimed at easing margin-funding requirements.
In a circular issued on Thursday, the capital markets regulator said clearing corporations must, in real time, refrain from collecting margin from trading members and clearing members on subsequent positions taken by clients, up to the value of EPI accepted by the clearing corporation.
The framework applies where a client has a net sell obligation in a settlement, and the clearing corporation has successfully accepted the EPI request for the securities sold.
Mint was the first to report in July that Sebi’s risk management review committee (RMRC) was discussing a waiver of margin for trades made from proceeds from the same-day stock sale under EPI.
EPI refers to delivering the shares you have sold to the stock market’s clearing corporation before the normal settlement deadline. For example, if you sell shares worth ₹1 lakh and deliver them early through EPI, the accepted value of those shares can be used to meet margin requirements for other trades.