New margin framework may aggravate the selling pressure: Brokerages

Brokers will also be required to collect 20 per cent upfront margin from clients from Tuesday to avoid any penalty

Brokerages fear that implementation of the new margin framework from Tuesday may aggravate the selling pressure, with several market participants yet to migrate to the new framework. This could lead to unwinding of client positions.

“Several clients would be required to un-pledge their securities from the old regime and re-pledge them under the new regime. Those that will not be able to re-pledge in the new regime could see their securities getting sold on Tuesday. There may be margin calls,” said the head of a broking house.

“We could see some impact on volumes till the system settles down,” said