Leading bourse the National Stock Exchange (NSE) today said trading members are required to compulsorily implement a risk-reduction mode when 90% of their capital is utilised towards margins, following market regulator Sebi's directive.
The move would be applicable for capital market and future & options segment. It would be effective from December 24, 2012, NSE said in a statement.
The stock broker would be moved back to the normal risk management mode as and when the collateral of the stock broker was lower than 85% utilisation level, NSE said.
Sebi last week asked bourses to ensure that the stock brokers mandatorily put in place "risk-reduction mode".
Under this mode, all unexecuted trades would be cancelled when 90% of the stock broker's collateral available for adjustment against margins gets utilised.
Sebi came out with stringent norms for bourses after a set of erroneous orders placed by brokerage Emkay Global on October 5 led to the Nifty crashing over 15% within a few minutes of opening.