Description

ICCL modifies additional margin requirements for Gold and Silver contracts, removing 1% margin from expiring contracts entering tender period and applying it to next month contracts effective October 30, 2025.

Summary

The Indian Clearing Corporation Limited (ICCL) has issued a modification to circular 20251022-1 dated October 22, 2025, updating additional margin requirements for Gold and Silver commodity derivatives contracts. The key change removes the 1% additional margin from November 2025 expiring contracts (GOLD and GOLDM) once they enter the tender period starting October 30, 2025, and applies this margin to December 2025 contracts. Similar treatment will apply to Silver contracts going forward.

Key Points

  • Additional 1% margin on GOLD and GOLDM November 5, 2025 contracts will be removed from Beginning of Day (BOD) October 30, 2025
  • Additional 1% margin will be applied to GOLD and GOLDM December 5, 2025 contracts from BOD October 30, 2025
  • For Silver contracts, additional margin will be removed when contracts enter tender period and applied to next expiring contracts
  • ‘Near Month’ defined as the near month contract expiry not in Tender Period
  • Circular issued under ICCL’s Rules, Bye-laws, and Regulations as part of periodic risk management review

Regulatory Changes

This circular modifies the previous ICCL circular no. 20251022-1 dated October 22, 2025. The change represents a systematic approach to margin management where additional margins rotate from expiring contracts entering tender period to the next near month contracts. This ensures continuous risk coverage while reducing margin burden on contracts in tender period.

Compliance Requirements

  • All Members/Participants of commodity derivatives segment must note the margin changes
  • Clearing Members must ensure adequate collateral for the 1% additional margin on December 2025 Gold contracts from October 30, 2025
  • Members should adjust their margin calculations and collateral deposits accordingly
  • Members must monitor the application and removal of margins as contracts transition through tender periods

Important Dates

  • October 30, 2025 (BOD): Additional 1% margin removed from GOLD and GOLDM contracts expiring November 5, 2025
  • October 30, 2025 (BOD): Additional 1% margin applied to GOLD and GOLDM contracts expiring December 5, 2025
  • November 5, 2025: Expiry date for current near month Gold contracts
  • December 5, 2025: Expiry date for next near month Gold contracts now subject to additional margin

Impact Assessment

Market Impact: Medium - affects all commodity derivatives traders dealing in Gold and Silver contracts. The rotation of additional margin from one contract month to another is a standard risk management practice that market participants should anticipate.

Operational Impact: Members need to adjust their margin calculations and collateral management systems to reflect the removal and application of the 1% additional margin on different contract months.

Financial Impact: Traders with positions in December 2025 Gold contracts will need to provide additional 1% margin from October 30, 2025, while those in November contracts will see margin relief as those contracts enter tender period. The net system-wide impact is neutral as the total additional margin requirement remains constant, just redistributed across contract months.

Risk Management: This measure supports systemic risk mitigation by maintaining additional margin coverage on actively traded near month contracts while reducing burden on contracts entering delivery phase.

Impact Justification

Routine margin adjustment affecting commodity derivatives traders in gold and silver contracts, with immediate implementation from October 30, 2025. Standard risk management measure with predictable impact.