Description

NSE Clearing announces changes to cross margin weightages and spread margins for NIFTY Index due to the demerger of Tata Motors Limited, effective October 13-16, 2025.

Summary

NSE Clearing Limited has issued changes to cross margin weightages following the demerger of Tata Motors Limited (TATAMOTORS). The circular outlines a phased approach for excluding TATAMOTORS from cross margin computation, publishing revised weightages, and implementing changes with a temporary increase in spread margins for NIFTY Index portfolios during the transition period.

Key Points

  • TATAMOTORS will be excluded from cross margin computation from October 13, 2025, end of day
  • Weightages for other Index constituents remain unchanged initially
  • Revised weightages for Indices will be published based on TATAMOTORS closing price on October 14, 2025
  • New weightages become effective from October 16, 2025, begin day
  • Spread margins for NIFTY Index portfolios temporarily increased from 25% to 30%
  • Members must sync portfolios to revised weightages by October 15, 2025, end of day

Regulatory Changes

This circular implements risk management adjustments necessitated by the corporate action of demerger in TATAMOTORS. The changes affect cross margin computation methodology for portfolios containing NIFTY Index constituents. The temporary spread margin increase provides additional risk cushion during the transitional period.

Compliance Requirements

  • All F&O members must sync their portfolios according to revised weightages by October 15, 2025, end of day
  • Members must account for the temporary spread margin increase from 25% to 30% for NIFTY Index portfolios
  • Members should prepare for the exclusion of TATAMOTORS from cross margin calculations
  • Portfolio adjustments must be completed before the revised weightages take effect on October 16, 2025

Important Dates

  • October 07, 2025: Circular issued
  • October 13, 2025 (end of day): TATAMOTORS excluded from cross margin computation; spread margins increased to 30%
  • October 14, 2025: Revised weightages to be published based on TATAMOTORS closing price
  • October 15, 2025 (end of day): Deadline for members to sync portfolios; last day of 30% spread margin
  • October 16, 2025 (begin day): Revised weightages become effective; spread margins return to normal

Impact Assessment

This circular has significant operational and risk management implications for all members trading F&O contracts on NIFTY Index. The demerger of TATAMOTORS, a major index constituent, requires recalibration of cross margin benefits. The temporary 20% increase in spread margins (from 25% to 30%) will increase margin requirements for affected portfolios during October 13-15, 2025, potentially impacting member liquidity and position management. Members must actively rebalance portfolios during the transition window to align with new weightages and avoid margin disruptions when changes take effect on October 16, 2025.

Contact Information

  • Telephone: 1800 266 0050 (IVR option 2)
  • Email: fao_clearing_ops@nsccl.co.in
  • Issuing Authority: Huzefa Mahuvawala, Chief Risk Officer
  • Department: Futures & Options
  • Reference Numbers: NCL/CMPT/70677, Circular 134/2025

Impact Justification

Significant changes to cross margin computation affecting all F&O members trading NIFTY Index; requires portfolio rebalancing and involves increased spread margins during transition period