NSE, BSE Refute Report Of Reduction In Stocks Eligible For Margin Trading Facility

The National Stock Exchange and the BSE—the country's two main bourses—on Thursday refuted claims of reduction in securities eligible for margin trading facility.

Their clarification came after a report claimed that the Securities and Exchange Board of India, via a circular supposedly issued last month, removed 1,010 stocks from the list of collaterals acceptable as margin pledges for availing margin trading facility.

"This is factually incorrect. No such circular was issued by SEBI in October, and no large-scale changes have been made recently to the list of securities on which MTF can be offered," the NSE and BSE said in a press release.

"Contrary to the article’s claim, there has been no reduction in the number of securities eligible for MTF," they added.

Under the current rules, MTF is available for stocks and exchange traded funds listed in the group-I category, which is updated monthly based on criteria like impact cost. Currently, around 2,000 securities are part of this group, the release noted.

NSE and BSE also pointed out that the acceptance of collaterals by Clearing Corporation is based on a risk-based objective approach to manage the efficiency of risk management and clearing and settlement.

"There is no scrip specific discrimination that is exercised while updating the list of acceptable collaterals on periodic basis," it said.

The exchanges also noted that the lending under MTF went up in October 2024 to all-time record high level of over Rs 80,500 crore.

Notably, SEBI had earlier approved the use of securities funded by cash collateral as part of the maintenance margin for margin trading, aimed at enhancing ease of doing business.

The move was intended to reduce the burden of providing additional collateral for the maintenance margin in margin trading. This change followed requests from market participants via the Industry Standards Forum to simplify margin trading requirements.