New margin norms to hit traditional brokers, more suited for online brokers

Uncertainty over outstanding F&O positions where margins given under erstwhile system

The Securities and Exchange Board of India’s (Sebi’s) new margin norms may hit traditional brokers harder than the new-age discount brokers or those that cater to institutional clients.

Market players said the new norms were more suited for online brokers, where clients were typically internet savvy.

For an offline broker, the client either visits the branch or places orders through the telephone. Creating a pledge, however, requires authentication on the depository website.

“The client now has to give the OTP to the broker over the phone to create a margin pledge. This defeats the purpose of the new system and also creates a