Description

BSE reduces minimum initial margin for silver contracts from 11.50% to 10.00% effective August 5, 2025.

Summary

BSE has revised the minimum initial margin for all variants of silver contracts, reducing it from 11.50% to 10.00%. This change modifies the previous circular dated July 23, 2025, and will be effective from August 5, 2025.

Key Points

  • Minimum Initial Margin reduced from 11.50% to 10.00%
  • Short Option Minimum Margin (SOMM) set at 10.00%
  • Applicable MPOR (Margin Period of Risk) remains at 3 days
  • Applicable VSR (Volatility Scanning Range) remains at 6%
  • Initial margin will be higher of minimum initial margin or VaR scaled up by MPOR

Regulatory Changes

Revision of margin parameters for silver contracts:

  • Previous minimum initial margin: 11.50%
  • New minimum initial margin: 10.00%
  • SOMM maintained at 10.00%
  • MPOR and VSR parameters unchanged

Compliance Requirements

  • All members and participants must implement the revised margin parameters
  • Initial margin calculation must use the higher of minimum initial margin or VaR scaled up by MPOR
  • Members should update their risk management systems accordingly

Important Dates

  • August 5, 2025: Effective date for revised margin parameters (Begin of Day)
  • July 23, 2025: Date of previous circular being modified

Impact Assessment

The margin reduction will:

  • Lower capital requirements for silver contract trading
  • Potentially increase trading activity in silver derivatives
  • Reduce trading costs for market participants
  • Maintain adequate risk coverage through VaR-based calculations

Impact Justification

Margin reduction affects silver contract trading costs but is a standard risk management adjustment