Description

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

Summary

NSE Clearing Limited has introduced an additional exposure margin framework for securities under Market-Wide Position Limit (MWPL) where client concentration is high. An additional exposure margin of 15% will be levied on securities in the equity derivatives segment where the top 10 clients account for more than 20% of MWPL. This measure is part of risk management protocols and will be reviewed monthly based on 3-month rolling data. RBL Bank Limited (RBLBANK) has been identified as the first security under this framework.

Key Points

  • Additional exposure margin of 15% to be levied on concentrated securities in equity derivatives
  • Applies to securities where top 10 clients account for more than 20% of MWPL
  • Higher of additional exposure margin or additional surveillance margin will be applied if surveillance margin is already applicable
  • Securities identified based on 3 months rolling data
  • Monthly review cycle for the list of affected securities
  • RBL Bank Limited (RBLBANK, ISIN: INE976G01028) is the first security identified under this framework
  • Reference to existing NSE circular No. NSE/INVG/40472 dated March 18, 2019 on Exposure margin of security under MWPL

Regulatory Changes

This circular establishes a new framework for additional exposure margin on securities with high client concentration under MWPL. The framework introduces:

  • A concentration-based margin mechanism targeting securities with top 10 clients holding more than 20% of MWPL
  • A tiered approach where the higher of additional exposure margin (15%) or existing additional surveillance margin applies
  • A dynamic identification process using 3-month rolling data with monthly reviews
  • Enhanced risk controls for concentrated positions in equity derivatives

Compliance Requirements

  • All members must ensure adequate margin collection for positions in affected securities
  • Members must account for the 15% additional exposure margin in their risk management systems
  • Members should monitor the monthly updates to the list of securities under this framework
  • Margin calculations must incorporate the higher of additional exposure margin or additional surveillance margin where applicable
  • Contact details for queries: Telephone - 1800 266 0050 (IVR option 2), Email - risk_ops@nsccl.co.in

Important Dates

  • Circular Date: October 16, 2025
  • Effective Date: October 29, 2025 (immediately after expiry of October 2025 contracts)
  • Review Frequency: Monthly basis
  • Data Period: 3 months rolling data for identification

Impact Assessment

Market Impact: The additional 15% exposure margin will significantly increase the margin requirements for trading in RBL Bank derivatives and any other securities added to this framework. This will directly impact:

  • Increased capital requirements for maintaining positions in affected securities
  • Higher cost of trading and reduced leverage for market participants
  • Potential reduction in trading volumes and liquidity in concentrated securities
  • Stronger risk mitigation against concentrated client positions that could pose systemic risks

Operational Impact: Members will need to:

  • Update margin calculation systems to incorporate the new 15% additional exposure margin
  • Implement monitoring mechanisms for monthly list updates
  • Adjust client communication and margin collection processes
  • Reassess position limits and risk parameters for affected securities

Risk Management: This measure strengthens market safety by addressing concentration risk in MWPL securities, reducing potential market disruption from large client positions. The monthly review ensures the framework remains responsive to changing market conditions.

Impact Justification

Significant 15% additional margin requirement affects trading costs and positions for securities with concentrated client positions, with immediate implementation after October 2025 contract expiry