Description
ICCL has revised the margin framework for commodity derivatives, updating minimum Initial Margin, SOMM, MPOR, and VSR for Brent Crude, WTI Crude, Gold, and Silver. Changes are effective from April 1, 2026.
Summary
ICCL 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 minimum Initial Margin (IM), Short Option Minimum Margin (SOMM), Margin Period of Risk (MPOR), and Volatility Scan Range (VSR) for key commodities including Brent Crude, WTI Crude, Gold, and Silver. The changes take effect from the beginning of day on April 1, 2026.
Key Points
- Brent Crude and WTI Crude: Per lead exchange’s revised framework, Minimum IM and SOMM are now 33% each, with VSR of 33% (up from the standard 10% IM/SOMM and 6% VSR)
- Silver: Minimum IM and SOMM revised to 11.50% each, VSR at 6% (up from 10% IM/SOMM)
- Gold: Remains at Medium volatility category with 8% IM, 8% SOMM, 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 corresponding futures contracts, whichever is higher
- Seller of options margin: higher of SOMM or VaR scaled up by MPOR of respective commodity
Regulatory Changes
This circular modifies ICCL Circular No. 20250909-5 dated September 05, 2025 and is issued in reference to:
- SEBI Circular SEBI/HO/CDMRD/DRMP/CIR/P/2020/15 dated January 27, 2020
- SEBI Circular SEBI/HO/CDMRD/DRMP/CIR/P/2021/08 dated January 11, 2021
Updated margin parameters by commodity:
| Commodity | Type | Volatility Category | Min IM % | SOMM % | Min MPOR | Min VSR % |
|---|---|---|---|---|---|---|
| Brent Crude | Non-Agri | High | 10% (33% per lead exchange) | 10% (33%) | 3 | 6% (33%) |
| WTI Crude | Non-Agri | High | 10% (33% per lead exchange) | 10% (33%) | 3 | 6% (33%) |
| Gold | Non-Agri | Medium | 8% | 8% | 2 | 5% |
| Silver | Non-Agri | High | 10% (11.50% per lead exchange) | 10% (11.50%) | 3 | 6% |
Compliance Requirements
- All Members and Participants of the Commodity Derivatives Segment must apply the revised margin parameters from April 1, 2026
- All existing margin types continue to apply: Extreme Loss Margin, Crystallized Loss Margin, Tender Period Margin, Delivery Period Margin, Concentration Margin, Additional Margin, Additional Lean Period Margin, and Special Margin
- For option sellers, ensure margin is levied as higher of SOMM or VaR scaled by MPOR
Important Dates
- Circular Date: March 10, 2026
- Effective Date: April 1, 2026 (beginning of day)
Impact Assessment
The most significant impact is on Brent Crude and WTI Crude traders, where the effective margin requirement jumps to 33% — more than triple the base framework rate of 10%. This substantially increases the capital requirement for participants holding crude oil positions, potentially reducing leverage and liquidity in those contracts. Silver margins see a moderate increase to 11.50%. Gold margins remain unchanged. Members should review their risk capital allocations and client margin requirements well ahead of the April 1, 2026 effective date.
Impact Justification
Significant revision to margin requirements for major commodity contracts including crude oil and precious metals, with WTI and Brent Crude margins rising sharply to 33%; affects all commodity derivatives segment members from April 1, 2026.