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SEBI sets up panel for reviewing Margins on Derivatives.

The Securities and Exchange Board of India (SEBI), the capital markets regulator has set up a panel, to review current framework of margins in the futures and options (F&O) derivative segment. Key Highlights The working group set up by SEBI is headed by the National Stock Exchange (NSE) Clearing Ltd., and will submit its recommendations to Secondary Market Advisory Committee. Reason: This is review panel is set up based on the feedback that exiisting margin requirements in derivatives segment is pushing up cost of trading while not managing risk in most efficient manner,.
Need: The reviewing of Margin Derivatives assumes significance as lower cost of trading was the main reason why institutional investors preferred to trade in Nifty contracts on Singapore Exchange Limited (SGX) at Singapore rather than on highly liquid derivatives segment of NSE.