New-age brokerages rework risk management policies to tide over volatility

New-age brokerage firms, which have been instrumental in bringing in paradigm shift to the ways stock investing is done in India, are now facing perhaps the toughest battle since their inception.

Extreme volatility in the equity market and the deep plunge in crude oil prices have made these discount brokerage firms vulnerable to risks of ‘defaults’. In order to tide over such crisis, mostly induced by Covid-19 pandemic, these start-ups are implementing several measures to ring-fence their operations from such market volatility. While some have restricted intra-day leverages given to clients for trading, others have stopped trading in illiquid scrips.