Description

NSE Clearing introduces 15% additional exposure margin on 14 securities where top 10 clients account for more than 20% of MWPL, effective December 31, 2025.

Summary

NSE Clearing Limited has announced the imposition of an additional exposure margin of 15% on 14 securities in the equity derivatives segment where the top 10 clients account for more than 20% of the Market-Wide Position Limit (MWPL). This framework is based on 3 months rolling data and will be reviewed monthly. The measure takes effect from December 31, 2025, immediately after the expiry of December 2025 derivatives contracts.

Key Points

  • Additional exposure margin of 15% will be levied on specified securities in equity derivatives segment
  • Applies to securities where top 10 clients account for more than 20% of MWPL
  • 14 securities identified under this framework (see list below)
  • Higher of additional exposure margin or additional surveillance margin will apply if both are applicable
  • Framework based on 3 months rolling data with monthly review
  • Reference circular: NSE/INVG/40472 dated March 18, 2019 on Exposure margin of security under MWPL

Affected Securities

  1. AUROPHARMA - Aurobindo Pharma Ltd (INE406A01037)
  2. CROMPTON - Crompton Greaves Consumer Electricals Limited (INE299U01018)
  3. HFCL - HFCL Limited (INE548A01028)
  4. IDEA - Vodafone Idea Limited (INE669E01016)
  5. INDUSINDBK - IndusInd Bank Limited (INE095A01012)
  6. JSWENERGY - JSW Energy Limited (INE121E01018)
  7. LICHSGFIN - LIC Housing Finance Limited (INE115A01026)
  8. NMDC - NMDC Limited (INE584A01023)
  9. PATANJALI - Patanjali Foods Limited (INE619A01035)
  10. PETRONET - Petronet LNG Limited (INE347G01014)
  11. PNBHOUSING - PNB Housing Finance Limited (INE572E01012)
  12. RBLBANK - RBL Bank Limited (INE976G01028)
  13. SAIL - Steel Authority of India Limited (INE114A01011)
  14. SAMMAANCAP - Sammaan Capital Limited (INE148I01020)

Regulatory Changes

NSE Clearing has implemented a concentration risk framework targeting securities with high client concentration in derivatives positions. The additional 15% exposure margin serves as a risk mitigation measure for positions where top 10 clients hold significant portions of the MWPL. When both additional exposure margin and additional surveillance margin are applicable to a security, the higher of the two margins will be levied.

Compliance Requirements

  • All members must ensure adequate margin collection on positions in the 14 identified securities
  • The additional 15% exposure margin applies to all positions in equity derivatives segment for these securities
  • Members should monitor monthly updates as the security list will be reviewed based on rolling 3-month data
  • Risk management systems must be updated to accommodate the higher margin requirements

Important Dates

  • Circular Date: December 24, 2025
  • Effective Date: December 31, 2025 (immediately after expiry of December 2025 contracts)
  • Review Frequency: Monthly basis using 3 months rolling data

Impact Assessment

Market Impact: This measure will increase the cost of trading in derivatives of the 14 identified securities, potentially reducing speculative activity and improving market stability. Trading members with large positions in these securities will face increased margin requirements, affecting their capital deployment.

Risk Management Impact: The additional margin requirement addresses concentration risk where a small number of clients hold substantial positions relative to MWPL. This reduces systemic risk from concentrated positions and improves overall market resilience.

Liquidity Impact: The higher margin requirements may temporarily reduce liquidity in derivatives of affected securities as traders adjust positions and capital allocation. However, this is balanced against improved market stability and reduced risk of excessive concentration.

Operational Impact: Members need to update risk management systems, increase margin collection processes, and communicate with clients holding positions in these securities about increased margin requirements.

Impact Justification

Significant 15% additional margin requirement on 14 securities affects trading costs and liquidity in equity derivatives segment, impacting traders with concentrated positions in these stocks.