The Securities and Exchange Board of India (Sebi) on Wednesday relaxed the exposure margin requirement for stock derivatives, based on the feedback received from market participants. Sebi issued a circular saying that the exposure margin would be higher of five per cent, or 1.5 times the standard deviation of the notional value of the gross open position in single stock futures and gross short open position in stock options in a particular underlying.
The revised exposure margin requirement would be effective from July 15. The exposure margin requirement was similar prior October 2008, after which Sebi increased the exposure margin requirement to higher of 10 per cent, or 1.5 times the standard deviation, to promote market safety and safeguard investor interest.