Description

Updated list of 40 equity shares eligible to form part of non-cash component of liquid assets with applicable haircuts and quantity limits for margin deposits.

Summary

NSE has issued a revised list of approved equity securities that can be deposited as part of the non-cash component of liquid assets for margin requirements. The circular specifies 40 equity shares from major companies across various sectors that are eligible for deposit, with VAR (Value at Risk) based haircuts applicable. Members can deposit each security subject to a maximum of 25% of total margins.

Key Points

  • 40 equity securities approved for non-cash liquid asset component
  • VAR-based haircut applicable on all listed securities
  • Maximum 25% of total margins can be in any single security
  • Overall permitted quantities specified across all segments
  • Member-wise permitted quantity for COM segment marked as N.A for all securities
  • List includes major blue-chip stocks from banking, IT, energy, automobile, FMCG, and other sectors

Regulatory Changes

This circular provides an updated list of approved securities for margin collateral purposes. The annexure maintains the framework where:

  • Each security is subject to position limits (overall permitted quantity across all segments)
  • Concentration limits apply (maximum 25% of total margins per security)
  • VAR methodology continues to be used for haircut calculation

Compliance Requirements

  • Trading members must ensure deposits of equity shares comply with the 25% concentration limit per security
  • Only the 40 securities listed in Annexure 1 are eligible for deposit as non-cash liquid assets
  • Members must monitor overall permitted quantities across all segments
  • VAR-based haircuts must be applied when valuing deposited securities
  • Securities must match the specified ISIN codes

Important Dates

No specific effective date mentioned in the provided content. This appears to be a periodic update to the approved securities list.

Impact Assessment

Market Impact: Medium - affects collateral management for trading members

Operational Impact: Trading members need to:

  • Review current holdings deposited as margins
  • Ensure compliance with updated list of 40 approved securities
  • Monitor concentration limits (25% cap per security)
  • Track overall permitted quantities

Securities Covered: 40 major large-cap equity shares including RELIANCE, HDFCBANK, ICICIBANK, ITC, INFY, TCS equivalents, and other prominent stocks across sectors

Stakeholders Affected: Trading members, clearing members, and market participants depositing equity collateral for margin requirements

Impact Justification

Standard periodic update to approved securities list for margin collateral, affects trading members' ability to deposit specific securities as non-cash margins with quantity restrictions