Description

NSE introduces 15% additional exposure margin on equity derivatives for securities where top 10 clients account for more than 20% of MWPL, effective August 29, 2025.

Summary

NSE Clearing Limited has announced the implementation of additional exposure margin at 15% on equity derivatives for securities where the top 10 clients account for more than 20% of Market Wide Position Limit (MWPL). This measure aims to enhance risk management in the derivatives segment.

Key Points

  • Additional exposure margin of 15% to be levied on specific securities in equity derivatives segment
  • Applies to securities where top 10 clients hold more than 20% of MWPL
  • Higher of additional exposure margin or additional surveillance margin will be applied where both are applicable
  • Securities identified based on 3-month rolling data with monthly review
  • RBL Bank Limited (RBLBANK) is currently the only security listed under this framework

Regulatory Changes

  • Introduction of concentration-based additional margin framework
  • Monthly review mechanism for securities under this framework
  • Integration with existing additional surveillance margin structure

Compliance Requirements

  • Trading members must ensure adequate margin coverage for positions in affected securities
  • Risk management systems need to be updated to incorporate the new margin requirements
  • Members should monitor client concentration in MWPL-affected securities

Important Dates

  • Effective Date: August 29, 2025 (immediately after expiry of August 2025 contracts)
  • Review Frequency: Monthly basis
  • Data Period: 3-month rolling data for identification

Impact Assessment

  • Increased trading costs for derivatives positions in affected securities
  • Enhanced risk management through concentration-based margin requirements
  • Potential reduction in speculative activity in securities with high client concentration
  • Market participants need to adjust position sizing and capital allocation strategies
  • Currently affects RBL Bank Limited derivatives trading

Impact Justification

Introduces significant additional margin requirements that directly impact trading costs and risk management for affected securities