Sebi issue norms on spread margin benefit

Markets regulator Sebi on Friday said margin benefit on spread positions, which was resulting in higher leverage, will be withdrawn latest by the start of tender period or the start of the expiry day, whichever is earlier.

The decision has been taken after receiving representations from markets participants.

Earlier, Sebi had prescribed that margin benefit on spread positions shall be entirely withdrawn latest by the start of the tender period or expiry-6th day, whichever is earlier.

"Margin benefit on spread positions shall be entirely withdrawn latest by the start of tender period or the start of the expiry day, whichever is earlier," Securities and Exchange Board of India (Sebi) said in a circular.

Spread margin, in market parlance, means an offsetting position where market participants are able to transfer excess margin from one account to another account whose margin is under the required maintenance margin.