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 requirements for all variants of silver contracts, reducing the rate from 11.50% to 10.00%. This modification updates the previous circular dated July 23, 2025, and will be effective from August 5, 2025.
Key Points
- Minimum Initial Margin (IM) reduced from 11.50% to 10.00% for all silver contract variants
- Short Option Minimum Margin (SOMM) set at 10.00%
- Margin Period of Risk (MPOR) remains at 3 days
- Volatility Scaling Ratio (VSR) maintained at 6%
- Initial margin will be the higher of minimum initial margin or VaR scaled up by MPOR
Regulatory Changes
The circular modifies ICCL Circular No. 20250723-44 dated July 23, 2025, by reducing margin requirements for silver derivatives trading. The change affects all variants of silver contracts traded on the commodity derivatives segment.
Compliance Requirements
- All members and participants must implement the revised margin parameters
- Risk management systems must be updated to reflect new margin calculations
- Compliance with the higher of minimum initial margin or VaR-based margin requirement
Important Dates
- Effective Date: Tuesday, August 5, 2025 (Begin of Day)
- Notice Date: August 2, 2025
- Previous Circular: July 23, 2025
Impact Assessment
The margin reduction will lower capital requirements for silver contract trading, potentially increasing market participation and liquidity. Traders will benefit from reduced upfront costs while maintaining adequate risk coverage through the VaR-based floor mechanism.
Impact Justification
Moderate impact margin reduction affecting silver contract traders and risk parameters