Description

Modification of additional margin requirements for Gold and Silver contracts during tender period, effective immediately.

Summary

BSE has issued a modification to ICCL circular dated November 3, 2025, regarding additional margins on Gold and Silver derivatives contracts. The circular specifies continuation of enhanced margin requirements during the tender period for specific contract variants expiring in late January and early February 2026. This is part of ICCL’s periodic review of risk management measures to mitigate systemic risk.

Key Points

  • Additional margins will continue during tender period for specified Gold and Silver contracts
  • Silver contracts (SILVERKG, SILVERM, SILVER) expiring January 30 and February 5, 2026: 4.5% additional margin
  • Gold contracts (GOLD, GOLDM) expiring February 5, 2026: 1% additional margin
  • Issued by ICCL Chief Risk Officer - Risk Management Department
  • Modifies previous circular no. 20251125-3 dated November 3, 2025

Regulatory Changes

This circular modifies the previous margin framework established in November 2025. The key change is the continuation of additional margin requirements specifically during tender periods for the following contracts:

Silver Contracts (4.5% Additional Margin):

  • SILVERKG expiring January 30, 2026
  • SILVERM expiring January 30, 2026
  • SILVER expiring February 5, 2026

Gold Contracts (1% Additional Margin):

  • GOLD expiring February 5, 2026
  • GOLDM expiring February 5, 2026

The differential margin rates reflect varying risk assessments between precious metal contract types during the tender period.

Compliance Requirements

  • All clearing members and participants must ensure adequate margin coverage for positions in affected contracts
  • Members must adjust their risk management systems to account for the additional margins during tender periods
  • Margin collection must comply with ICCL Rules, Bye-laws, and Regulations
  • Members should communicate these requirements to their clients holding positions in affected contracts

Important Dates

  • Circular Issue Date: January 28, 2026
  • Silver Contract Expiry: January 30, 2026 (SILVERKG, SILVERM)
  • Gold & Silver Contract Expiry: February 5, 2026 (SILVER, GOLD, GOLDM)
  • Tender Period: Additional margins apply during tender period for each respective contract

Impact Assessment

Market Impact: Traders holding positions in Gold and Silver contracts approaching expiry will face increased margin requirements during tender periods. This may affect trading strategies and position management as the additional 4.5% margin on Silver and 1% on Gold contracts increases capital requirements.

Operational Impact: Clearing members must ensure systems are configured to collect the enhanced margins. Clients may need to deposit additional funds or reduce positions to meet margin calls. The differentiated margin rates (4.5% for Silver vs 1% for Gold) suggest higher volatility concerns for Silver contracts.

Risk Management Impact: The continuation of additional margins demonstrates ICCL’s proactive approach to managing systemic risk during tender periods when delivery-related volatility typically increases. This measure protects market integrity and reduces settlement risk.

Contact Information:

Impact Justification

Updates margin requirements for commodity derivatives traders during tender period. Impacts trading costs and risk management for gold and silver contracts but is a routine regulatory adjustment.