Description
ICCL has revised the margin framework for commodity derivatives, updating Initial Margin, SOMM, MPOR, and VSR requirements for key commodities including Crude Oil, Gold, and Silver, effective April 1, 2026.
Summary
ICCL (Indian Clearing Corporation Limited) has reviewed and revised the margin framework for the Commodity Derivatives Segment in modification of ICCL Circular No. 20250909-5 dated September 05, 2025. The revision updates the minimum Initial Margin (IM), Short Option Minimum Margin (SOMM), Margin Period of Risk (MPOR), and Volatility Scan Range (VSR) for key commodities. The new framework takes effect from the beginning of day on April 01, 2026.
Key Points
- Brent Crude and WTI Crude Oil: Minimum IM and SOMM revised to 33%, VSR revised to 33% as per the lead exchange’s revised risk management framework
- Silver: Minimum IM and SOMM revised to 11.50%, VSR revised to 6% as per the lead exchange’s revised risk management framework
- Gold remains in the Medium volatility category with Minimum IM of 8%, SOMM of 8%, MPOR of 2, and VSR of 5%
- Minimum IM % shall not be scaled up by MPOR
- For option contracts, MPOR shall be at least two days or the MPOR of the corresponding futures contract, whichever is higher
- Margins for option sellers shall be higher of SOMM or VaR scaled up by MPOR
Regulatory Changes
This circular modifies ICCL Circular No. 20250909-5 dated September 05, 2025, and is issued in reference to:
- SEBI Circular No. SEBI/HO/CDMRD/DRMP/CIR/P/2020/15 dated January 27, 2020
- SEBI Circular No. SEBI/HO/CDMRD/DRMP/CIR/P/2021/08 dated January 11, 2021
Updated Margin Table:
| Commodity | Type | Volatility Category | Min IM % | SOMM % | Min MPOR | Min VSR % |
|---|---|---|---|---|---|---|
| Brent Crude^ | Non-Agri | High | 10% (33%^) | 10% (33%^) | 3 | 6% (33%^) |
| WTI Crude^ | Non-Agri | High | 10% (33%^) | 10% (33%^) | 3 | 6% (33%^) |
| Gold | Non-Agri | Medium | 8% | 8% | 2 | 5% |
| Silver** | Non-Agri | High | 10% (11.50%**) | 10% (11.50%**) | 3 | 6% |
^ Lead exchange revised framework applies: 33% IM, SOMM, and VSR ** Lead exchange revised framework applies: 11.50% IM and SOMM
Compliance Requirements
- All Members and Participants in the Commodity Derivatives Segment must update their risk systems to reflect the revised margin parameters
- Ensure margin collection from clients aligns with the new minimum requirements effective April 01, 2026
- All other existing margins (Extreme Loss Margin, Crystallized Loss Margin, Tender Period Margin, Delivery Period Margin, Concentration Margin, Additional Margin, Additional Lean Period Margin, and Special Margin) remain unchanged and continue to apply
- For queries, contact ICCL Risk Department: risk.monitoring@icclindia.com | +91-022-2272 8811 / 022-2272 8614
Important Dates
- Circular Date: March 10, 2026
- Effective Date: April 01, 2026 (beginning of day)
Impact Assessment
This circular has a high impact on commodity derivatives market participants. The most significant change is the sharp increase in margin requirements for WTI Crude Oil and Brent Crude Oil contracts to 33% (from the baseline 10%), reflecting elevated risk in the global crude oil market. Silver margins also increase to 11.50%. These higher margin requirements will:
- Increase the capital requirements for traders holding crude oil and silver positions
- Potentially reduce leverage available to participants in these segments
- Enhance systemic risk protection for the clearing corporation
- Affect hedgers, speculators, and arbitrageurs active in crude oil and silver futures/options markets
Gold margins remain unchanged, indicating stable risk perception for that commodity.
Impact Justification
Significant changes to margin requirements for major commodities (Crude Oil, Gold, Silver) affecting all members/participants in the commodity derivatives segment, with WTI and Brent Crude Oil margins rising sharply to 33% and Silver to 11.50%.