NSE members get Rs 700 cr benefit from cross margining

Trading members on the National Stock Exchange have pocketed around Rs 700 crore from cross margining so far and this new mechanism is likely to result in a greater amount of trading depth.

The cross margining mechanism implemented by the National Stock Exchange last month has received good response in registrations and trading members have benefited around Rs 700 crore due to this facility so far, NSE said in a statement.

"This new mechanism would definitely help. As brokers can use their holding in the cash market as a margin for the F&O requirement. This would also help the volumes because it will help the trading members to use their limited resources for capital gains," Nexgen Capital equity head Jagannadham Thunuguntla said.

Cross margining mechanism was implemented in February this year, and within a month of its implementation, over 20 per cent of members in the equity segment and 30 per cent of members in the equity derivatives segment have signed up for this facility for more than 3 lakh clients, NSE added.

Besides, registration for NSE's cross margin mechanism is continuously rising and members have benefitted around Rs 700 crore due to this facility, the statement added.

In December 2008, the Securities and Exchange Board of India, permitted cross margining of positions in equities and equity derivatives.