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Retail investors to lose as Sebi, brokers tussle over new margin norms

From the investor and trader perspective, higher margin with the promise of yet another margin hike by year-end could mean lower trading volumes and lower prices in the cash segment

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Assuming the new margin regime comes into force and further tightening in December happens, the higher margins will impact trading volumes to some extent

Devangshu Datta

4 min read Last Updated : Jul 29 2020 | 8:07 AM IST

The new margin norms, which kick in from August 1, 2020, are causing some apprehensions in the trading community. There could be initial technical issues because the brokers claim that they need software upgrades to implement. However, initial glitches apart, there could be a volume crunch that leads to long-term trends of lower valuations.

The essential difference is that traders will have to maintain, or pay their full margin upfront, for trades in the cash market. They will have to put the margin down even before they sell a stock. The earlier system, which is being phased out by July

Topics : Sebi Sebi norms Retail investors Investors Markets

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