of institutional trades in the cash market
Members are hereby informed that the Exchange has
received one Circular from SEBI Ref. No MRD/DoP/Cir-05/2007 dated April
27,2007. The contents of the said Circular are given here under for information
of the members.
Chief General Manager
Market Regulation Department-Division of
MRD/DoP/SE/Cir- 06 /2008
March 19 2008
of all Stock
Dear Sir / Madam,
Sub:- Margining of institutional trades in the cash market
vide circular dated
February 23, 2005 had specified the risk management framework for the cash
- In order to provide a level
playing field to all the investors in the cash market as in the case of
derivatives market, the aforesaid circular is partially modified to
provide that all institutional trades in the cash market would be subject
to payment of margins as applicable to transactions of other investors.
This would be implemented with effect from Monday, April 21, 2008.
begin with, from April 21, 2008, all institutional trades in the cash
market would be margined on a T+1 basis with margin being collected from
the custodian upon confirmation of the trade.
with effect from June 16, 2008, the collection of margins would move to an
Stock Exchanges shall issue the necessary guidelines in this regard and
shall put in place the necessary systems to ensure the operationalization
of the above.
- The Stock Exchanges are also
- test the software and remove any glitches in
its operation well before the commencement date to avoid any problems in
the live environment.
- make necessary amendments to the
relevant bye-laws, rules and regulations for the implementation of the
- bring the provisions of this
circular to the notice of the member brokers/clearing members of the
Exchange and also to disseminate the same on the website.
- communicate to SEBI, the status of the
implementation of the provisions of this circular in the Monthly
- This circular is being issued
in exercise of powers conferred under Section 11 (1) of the Securities and
Exchange Board of India Act, 1992, to protect the interests of investors
in securities and to promote the development of, and to regulate the
S V Murali Dhar Rao
The members are
requested to note the aforesaid guideline of SEBI and act accordingly.