‘No reduction in number of securities’: BSE, NSE clarify on margin funding

The domestic stock exchanges BSE and NSE in a joint statement clarified that there has been no reduction in the number of securities eligible for Margin Trading Facility (MTF). The clarification was issued by exchanges in response to a report circulating in media stating that a regulatory circular supposedly issued in October 2024, expelled 1010 stocks from the list of 'collaterals' acceptable for availing MTF.

“There is a report in media stating that a regulatory circular supposedly issued in October 2024 expelled 1010 stocks, effective November 2024, from the list of 'collaterals' acceptable as margin pledges for availing Margin Trading Facility (MTF) from clearing corporations,” as per the statement released by the exchanges today.

As per the release, the report is “factually” incorrect. “No such circular was issued by SEBI in October, and no large-scale changes have been made recently to the list of securities on which MTF can be offered.”

It is notable that lending under MTF went up in October 2024 to all-time record high level of over ₹80,500 crore.

“Contrary to the article’s claim, there has been no reduction in the number of securities eligible for MTF,” the exchanges say in its clarification. Further, acceptance of collaterals by Clearing Corporation is based on risk based objective approach to manage the efficiency of risk management and clearing and settlement.  There is no scrip specific discrimination that is exercised while updating the list of acceptable collaterals on periodic basis, they add.

According to the current Regulatory framework, MTF is provided by Trading Members (TMs) to their clients, in Stocks and Exchange Traded Funds that are part of Group I list of securities issued by Clearing Corporations. The list of Group I securities is computed based on objective criteria of impact cost and same is updated every month and published by Exchanges’ on their websites. As per this, currently around 2,000 securities form part of Group I.