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Sebi postpones margin rules implementation by one month
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SME Times News Bureau | 31 Jul, 2020
Bringing some relief to stock
brokers, the Securities and Exchange Board of India (Sebi) on Friday
postponed the implementation of the new rules for upfront margin
collection in the cash segment by a month.
The norms will now come into effect from September 1, instead of the previously scheduled August 1.
Further,
the regulator has also eased the norms. It said in a circular that if
stock brokers collect a minimum 20 per cent upfront margin, then a
penalty for short-collection or non-collection of margin shall not be
applicable.
"If TM/CM (trading member/clearing member) collects a
minimum 20 per cent upfront margin in lieu of VaR and ELM from the
client, then penalty for short-collection/non-collection of margin shall
not be applicable. However, it is reiterated that the Clearing
Corporation shall continue to collect the upfront margin from the TM/CM
based on VaR and ELM," it said.
The penalty provision for
short-collection or non-collection of upfront margin in the cash segment
shall be implemented with effect from September 1, the circular said.
The
trading community of late has raised concerns on the new guidelines,
and the brokers said that there could be volume crunch apart from
initial technical issues.
In another decision, Sebi has permitted
using digital signatures for authentication and certification of any
filing and submission made to the stock exchanges till December 31.
The
market regulator said that it has received a representation from the
Institute of Company Secretaries of India (ICSI) stating that due to the
Covid-19 pandemic and precautionary measures, company secretaries
continue to face operational challenges in carrying out certification
and authentication of documents in physical form.
"The extension
of Sebi to continue using digital signatures is definitely a way forward
to ensure that we keep going with the aid of technology and facilitate a
more hygienic and safe means of operation avoiding the need for
physical interaction," Sonam Chandwani, Managing Partner at KS Legal
& Associates, said.
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