NSE Tightens Criteria For Securities Eligible As Collateral For F&O Trading
The equity securities not fulfilling the criteria will not be accepted from Aug 1.
Over 1,000 securities will not be eligible to trade under the futures and options segment as the country's biggest stock exchange tightened the criteria for securities eligible as collateral.
NSE Clearing Ltd. will only accept securities with an impact cost of up to 0.1% for an order value of Rs 1 lakh and which are traded for at least 99% of days over the previous 6 months. The equity securities not fulfilling the above criteria will not be accepted from Aug. 1, according to the statement from the National Stock Exchange on Thursday.
NSE released the tentative list of securities that are not fulfilling the criteria. One 97 Communications Ltd., Yes Bank Ltd., Suzlon Energy Ltd., Bharat Dynamics Ltd, Bharti Hexacom Ltd and Tata Investment Corp. are among the 1,010 securities that are not currently fulfilling the latest eligible criteria set by the NSE.
The final list of acceptable equity list will be published as part of the monthly circular of approved securities, the statement said. The clearing members are requested to ensure that the un-approved securities are replaced by approved collaterals at the earliest, NSE said.
To enable clearing members to replace the existing un-approved securities NCL will continue to provide valuation of such existing un-approved securities repledged with NCL as on July 31, 2024, after applying the haircut as below, NSE said.
To enable the transition, the haircut applicable from Aug. 1, 2024 will be 40% or Value-at-Risk whichever is higher which will rise to 60% from Sept. 1. From Oct. 1, the haircut will rise to 80% Value-at-Risk whichever is higher and from Nov. 1, the haircut will be 100%, NSE said.
For mutual funds, the haircut in respect of units of growth plans of overnight mutual fund schemes shall be 5%. For schemes other than units of overnight mutual fund schemes, liquid mutual fund schemes or government securities mutual fund schemes, the haircut will be VaR margin based on six standard deviation, subject to a minimum of 9%, NSE said.
