Description

NSE updates the list of approved equity securities that can be deposited as non-cash component of liquid assets for margin requirements in Futures & Options segment.

Summary

NSE has issued a revised list of approved equity securities that trading members can deposit as non-cash component of liquid assets for margin requirements in the Futures & Options segment. The circular specifies 40+ securities with their permitted quantities and applicable haircuts based on Value at Risk (VAR). Members can deposit each security subject to a maximum of 25% of total margins.

Key Points

  • Applicable haircut for approved securities is based on VAR (Value at Risk)
  • Each security can be deposited up to maximum 25% of total margins
  • List includes major blue-chip stocks across sectors
  • Overall permitted quantities specified for each security across all segments
  • Memberwise permitted quantity for FO segment marked as N.A (indicating separate calculation/allocation)
  • Covers 40+ securities including Reliance, HDFC Bank, ICICI Bank, Infosys, ITC, and other large-cap stocks

Regulatory Changes

This circular updates the previously approved list of securities and banks that can be used as collateral. The revision includes updated permitted quantities for each security across all segments. The VAR-based haircut methodology continues to apply for risk management purposes.

Compliance Requirements

  • Trading members must ensure securities deposited as collateral are from the approved list only
  • Maximum exposure limit of 25% of total margins per security must be maintained
  • Members should monitor overall permitted quantities to ensure compliance
  • VAR-based haircuts will be applied to determine the value of pledged securities
  • Separate compliance for FO segment memberwise permitted quantities as applicable

Important Dates

  • Circular Date: November 20, 2025
  • Effective Date: Not explicitly mentioned in the provided content (typically effective immediately unless stated otherwise)

Impact Assessment

Market Impact: Medium - This affects how trading members manage their collateral and margin obligations. The list includes highly liquid large-cap stocks which form the core of collateral portfolios.

Operational Impact: Trading members need to review their current collateral positions against the revised list and permitted quantities. Any securities not on the approved list or exceeding permitted quantities will need to be replaced or adjusted.

Risk Management: The VAR-based haircut approach ensures dynamic risk management aligned with market volatility. The 25% concentration limit per security promotes diversification and reduces concentration risk in collateral portfolios.

Impact Justification

Affects trading members' ability to pledge securities for margin requirements. Changes in approved securities list and permitted quantities can impact collateral management strategies.