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Securities and Exchange Board of India
CIRCULAR
SEBI/HO/MRD2/DCAP/P/CIR/2022/60 May 10, 2022
To
All Recognized Stock Exchanges and Clearing Corporations
Dear Sir/ Madam,
Sub: Changes to the Framework to Enable Verification of Upfront Collection of
Margins from Clients in Cash and Derivatives segments
SEBI, vide circular SEBI/HO/MRD2/DCAP/CIR/P/2020/127 dated July 20, 2020, prescribed
the framework to enable verification of upfront collection of margins from clients in cash and
derivatives segments.
2. Further, SEBI, vide circular SEBI/HO/CDMRD/CDMRD_DRM/P/CIR/2021/689 dated
December 16, 2021, inter alia, modified the aforesaid framework prescribed vide said
circular dated July 20, 2020, providing for additional snapshots for commodity
derivatives segment.
3. Clause (i) of Annexure to the said circular dated July 20, 2020, inter-alia, requires
Clearing Corporations to send snapshots of client wise margin requirement to TMs/CMs
for them to know the intra-day margin requirement per client in each segment.
4. In view of the representations received from market participants and based on
deliberations with various stakeholders, it has been decided that the margin
requirements to be considered for the intra-day snapshots, in derivatives segments
(including commodity derivatives), shall be calculated based on the fixed Beginning of
Day (BOD) margin parameters. The BOD margin parameters would include all SPAN
margin parameters as well as ELM requirements.
5. There shall be no change in methodology of determination and collection of End of Day
(EOD) margin obligation of the client. Also, there shall be no change in the provisions
relating to collection and reporting of margins in cash segment.
6. Further, it is clarified that the above mentioned change is only for the purpose of
verification of upfront collection of margins from clients. The margin parameters
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Securities and Exchange Board of India
applicable for collection of margin obligation by Clearing Corporations shall continue to
be updated intra-day, as per the extant provisions.
7. SEBI circulars dated July 20, 2020 and December 16, 2021 shall, accordingly, be
modified to the above extent. All other provisions of the said SEBI circulars dated July
20, 2020 and December 16, 2021 shall continue to remain applicable.
8. The provisions of this circular shall come into effect from August 01, 2022.
9. Stock Exchanges and Clearing Corporations are directed to:
a) take necessary steps to put in place systems for implementation of the circular,
including necessary amendments to the relevant bye-laws, rules and regulations;
b) bring the provisions of this circular to the notice of their members and also
disseminate the same on their websites; and
c) communicate to SEBI, the status of implementation of the provisions of this circular
in the Monthly Development Report.
10. This circular is being issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992, read with Section 10 of the
Securities Contracts (Regulation) Act, 1956 to protect the interests of investors in
securities and to promote the development of, and to regulate the securities market.
11. This circular is available on SEBI website at www.sebi.gov.in at “Legal
Framework→Circulars”.
Yours faithfully
(Sudeep Mishra)
General Manager
Market Regulation Department
Email: sudeepm@sebi.gov.in
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