The Securities and Exchange Board of India committee set up for rationalising the margin structure is expected to finalise common set of margin norms today. The meeting is expected to discuss adjustment of mark-to-market margins in case of gains, parameters for additional volatility margin and definition of base capital.
"Stock exchanges follow different rules for collecting margins. The new rule will ensure that the base minimum or additional capital is not used as mark-to-market margin," senior Sebi executive director L K Singhvi said.
The committee is also expected to finalise a specific period of reference for the additional volatility margin imposed by stock exchanges.
"Under the existing system, stock exchanges have freedom to impose additional volatility margins on stocks. However, parameters used by stock exchanges to impose this margin varies. The committee will decide on a common set of parameters to curb volatility," he added.
Singhvi also stated that the revamp of the margin system was necessary as some exchanges accepted additional capital for mark-to-market margins. A new set of rules for margin collection is also expected to be finalised in the meeting.
