The Securities and Exchange Board of India (SEBI) is set to tighten its grip on the Margin Trading Facility (MTF), introducing a robust overhaul designed to fortify the financial health of brokerage houses. Under the new proposals, the regulatory body plans to raise the minimum net-worth requirement for brokers to ₹5 crore, ensuring that firms maintain a more substantial capital cushion.
A core component of these updates involves the rejection of lower cash collateral margins. By mandating stricter collateral standards, the regulator aims to mitigate systemic risk and ensure that brokers remain liquid during periods of heightened market volatility.
Furthermore, SEBI is introducing a structured 30-day window for brokers to manage restricted stocks effectively. This operational change is intended to provide clearer guidance on the treatment of specific securities, reducing ambiguity in how firms handle limited-access assets.
These proactive measures reflect SEBI's broader commitment to safeguarding retail investors and enhancing market transparency. As these rules take shape, the brokerage industry must prepare for a significant transition in compliance and risk infrastructure.
