Date: 2020-04-27Category: Not ApplicableState: Union GovernmentCountry: India
Extension of implementation date of Circular on ‘Review of Margin Framework for Cash and Derivatives segments (except for Commodity Derivatives Segment)’
**Summary:**
This circular, issued by the Securities and Exchange Board of India (SEBI) on April 27, 2020, with reference number SEBI/HO/MRD2/DCAP/CIR/P/2020/74, announces an extension to the implementation date of the revised margin framework for cash and derivatives segments. This framework, initially outlined in Circular No. SEBI/HO/MRD2/DCAP/CIR/P/2020/27 dated February 24, 2020, excludes commodity derivatives. Due to challenges related to the COVID-19 pandemic and existing surveillance measures, the implementation date has been extended from May 1, 2020, to June 1, 2020.
The circular directs all recognized stock exchanges and clearing corporations (excluding those in International Financial Services Centres) to implement the necessary systems, amend relevant regulations, inform their members, and disseminate the information on their websites. Furthermore, exchanges and clearing corporations are required to report the implementation status in their Monthly Development Report to SEBI.
This directive is issued under the authority of Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Section 10 of the Securities Contracts Regulation Act, 1956, aimed at protecting investor interests, promoting market development, and regulating the securities market. The circular is available on the SEBI website under Legal Framework/Circulars.
For further information, contact Pradip Bhowmick, Deputy General Manager, Market Regulation Department, at pradipb@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): The regulatory body issuing the circular regarding margin framework for cash and derivatives segments.
All Recognized Stock Exchanges: Addressees of the circular. Entities regulated by SEBI.
All Recognized Clearing Corporations: Addressees of the circular. Entities regulated by SEBI.
International Financial Services Centre: A financial hub, stock exchanges and clearing corporations in which are excluded from this circular
Circular no. SEBIHOMRD2DCAPCIRP202027: Previous circular dated February 24, 2020, regarding review of margin framework for cash and derivatives segments.
COVID19: The pandemic cited as a reason for extending the implementation date of the circular.
Securities and Exchange Board of India Act 1992: The act under which SEBI derives its powers to issue circulars.
Securities Contracts Regulation Act, 1956: Another act under which SEBI derives its powers to regulate the securities market.
CIRCULAR
SEBI/HO/MRD2/DCAP/CIR/P/2020/74 April 27, 2020
To
All Recognized Stock Exchanges and Clearing Corporations (except Stock Exchanges
and Clearing Corporations in International Financial Services Centre)
Dear Sir/ Madam
Extension of implementation date of Circular on ‘Review of Margin Framework
for Cash and Derivatives segments (except for Commodity Derivatives
Segment)’
1 SEBI, vide Circular no. SEBI/HO/MRD2/DCAP/CIR/P/2020/27 dated February 24,
2020, reviewed the margin framework for cash and derivatives segments (except
for commodity derivatives segment). The provisions of this Circular were to come
into effect from May 01, 2020.
2 In view of the challenges arising out of COVID-19 pandemic and various other
surveillance measures in place, it has been decided to extend the implementation
date of the provisions of the aforesaid Circular to June 01, 2020.
3 Stock Exchanges and Clearing Corporations are directed to:
a) take necessary steps to put in place systems for implementation of the
circular, including necessary amendments to the relevant bye-laws, rules
and regulations;
b) bring the provisions of this circular to the notice of their members and
also disseminate the same on their websites; and
c) communicate to SEBI, the status of implementation of the provisions of this
circular in the Monthly Development Report.
4 This circular is issued in exercise of the powers conferred under Section
11(1) of the Securities and Exchange Board of India Act 1992, read with
Section 10 of the Securities Contracts (Regulation) Act, 1956 to protect the
interests of investors in securities and to promote the development of, and
to regulate the securities market.
Page 1 of 25 This circular is available on SEBI website at www.sebi.gov.in at “Legal
Framework→Circulars”.
Yours faithfully
Pradip Bhowmick
Deputy General Manager
Market Regulation Department
email: pradipb@sebi.gov.in
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