Description

Updated list of equity shares eligible as non-cash component of liquid assets for collateral deposits, with applicable haircuts and quantity limits.

Summary

NSE has issued a revised list of equity shares that can be deposited as the non-cash component of liquid assets for collateral deposit purposes. The circular specifies 40 approved securities with VAR-based haircuts and quantity limitations. Each security can be deposited up to a maximum of 25% of total margins by any member.

Key Points

  • 40 equity shares approved as non-cash collateral for liquid assets
  • VAR (Value at Risk) based haircuts apply to all listed securities
  • Maximum 25% of total margins can be deposited in any single security
  • Overall permitted quantities specified across all segments
  • Memberwise permitted quantity for CD segment marked as N.A for all securities
  • List includes major blue-chip stocks across banking, FMCG, IT, automotive, energy, and other sectors

Regulatory Changes

This circular updates the list of approved securities eligible for collateral deposits. The key regulatory framework remains:

  • Haircut Methodology: VAR-based haircuts continue to apply
  • Concentration Limits: 25% cap per security maintained to ensure diversification
  • Quantity Caps: Overall permitted quantities defined for each security across all segments

Compliance Requirements

For Trading Members:

  • May deposit approved securities as non-cash collateral subject to 25% concentration limit per security
  • Must ensure deposits do not exceed overall permitted quantities for each security
  • Must comply with VAR-based haircut calculations on deposited securities
  • CD segment specific limits currently marked as N.A

Securities Eligible: The approved list includes 40 securities spanning multiple sectors:

  • Financial Services: AXISBANK, BAJAJFINSV, BAJFINANCE, HDFCBANK, HDFCLIFE, ICICIBANK, JIOFIN, KOTAKBANK, SBILIFE, SBIN, SHRIRAMFIN
  • IT & Technology: HCLTECH, INFY
  • Energy & Utilities: COALINDIA, NTPC, ONGC, POWERGRID, RELIANCE
  • Automotive: BAJAJ-AUTO, EICHERMOT, M&M, MARUTI
  • FMCG & Consumer: ASIANPAINT, HINDUNILVR, ITC, NESTLEIND
  • Healthcare: APOLLOHOSP, CIPLA, DRREDDY, MAXHEALTH
  • Industrials & Infrastructure: ADANIENT, ADANIPORTS, BEL, GRASIM, HINDALCO, JSWSTEEL, LT
  • Aviation: INDIGO
  • Telecommunications: BHARTIARTL
  • Others: ETERNAL

Important Dates

No specific effective date or deadline mentioned in the circular content provided.

Impact Assessment

Market Impact:

  • Moderate impact on collateral management strategies for trading members
  • Provides clarity on eligible securities for margin deposit purposes
  • Concentration limits ensure risk diversification across member portfolios

Operational Impact:

  • Trading members can optimize their collateral deployment across 40 approved securities
  • Quantity caps prevent over-concentration in any single security across the exchange
  • VAR-based haircuts ensure dynamic risk adjustment based on market volatility

Liquidity Impact:

  • Approved securities list includes highly liquid blue-chip stocks
  • Members have flexibility in choosing collateral based on their portfolio holdings
  • 25% per-security limit encourages diversified collateral base

Impact Justification

Updates to approved securities list affect margin deposit options for trading members, impacting liquidity management but not changing fundamental trading rules.