SEBI notifies about securities funded through cash collateral as maintenance margin for Margin Trading Facility

Securities and Exchange Board of India (SEBI) issued guidelines regarding allowing securities funded through cash collateral as maintenance margin for Margin Trading Facility (MTF). SEBI noted that the stocks or units of Equity ETFs deposited as collateral with the stock broker for availing margin trading facility (Collaterals) and the stocks or units of Equity ETFs purchased under the margin trading facility (Funded stocks) shall be identifiable separately and no comingling shall be permitted for the purpose of computing funding amount. Further, in case the broker has collected cash collateral from the client in form of margin for availing margin trading facility and the Trading Member has given the said cash collateral to the Clearing Corporation (CC) towards settlement obligation of the said client, then same can be considered as maintenance margin to the extent of securities received from CC against such cash collateral given to CC and such shares are pledged in favor of trading member in form of funded stock.

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