Description

NSE introduces 15% additional exposure margin in equity derivatives for 18 securities where top 10 clients account for over 20% of MWPL, effective January 28, 2026.

Summary

NSE Clearing Limited has introduced an additional exposure margin of 15% in the equity derivatives segment for securities where the top 10 clients account for more than 20% of the Market-Wide Position Limit (MWPL). This measure is designed to address concentration risk and will be reviewed monthly based on 3-month rolling data. The framework becomes effective January 28, 2026, after the expiry of January 2026 contracts. A total of 18 securities have been identified for this additional margin requirement.

Key Points

  • Additional exposure margin of 15% to be levied on identified securities in equity derivatives segment
  • 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 levied if surveillance margin is already applicable
  • Securities identified based on 3-month rolling data
  • Monthly review mechanism for the list of affected securities
  • 18 securities currently identified including major names like RBL Bank, JSW Energy, SAIL, Vodafone Idea, and others

Regulatory Changes

This circular implements a new risk management framework building on NSE circular NSE/INVG/40472 dated March 18, 2019 regarding exposure margin of securities under MWPL. The key regulatory change is the introduction of a concentration-based additional margin requirement specifically targeting securities with high client concentration in derivatives positions.

Compliance Requirements

  • All trading members must ensure adequate margin collection for the 18 identified securities
  • Where additional surveillance margin already exists, members must apply the higher of the two margins (15% additional exposure margin or existing surveillance margin)
  • Members must monitor their client positions in these securities to ensure compliance with the enhanced margin requirements
  • Margin calculations must be updated by effective date of January 28, 2026

Important Dates

  • Circular Issue Date: January 20, 2026
  • Effective Date: January 28, 2026 (immediately after expiry of January 2026 contracts)
  • Review Frequency: Monthly basis using 3-month rolling data

Impact Assessment

This measure will have significant impact on derivatives trading in the identified 18 securities. Traders and institutions with large positions in these stocks will face increased margin requirements of 15%, leading to:

  1. Higher Capital Requirements: Participants will need to allocate 15% additional funds as margin, reducing leverage
  2. Liquidity Impact: The higher margin may reduce speculative activity and potentially impact liquidity in derivatives of these securities
  3. Cost of Trading: Increased cost of carry for derivatives positions in these securities
  4. Risk Mitigation: Addresses concentration risk by ensuring adequate margining for securities with concentrated client positions
  5. Affected Securities: Major banking (RBL Bank, Bandhan Bank), PSU (SAIL, NMDC, NBCC), telecom (Vodafone Idea), energy (JSW Energy, Petronet LNG), pharma (Aurobindo, Glenmark), and financial services (LIC Housing Finance, PNB Housing, Manappuram Finance, Aditya Birla Capital) stocks are impacted

Securities Covered

The following 18 securities are subject to the additional 15% exposure margin:

  1. RBL BANK LIMITED (RBLBANK)
  2. JSW Energy Limited (JSWENERGY)
  3. Steel Authority of India Limited (SAIL)
  4. Sammaan Capital Limited (SAMMAANCAP)
  5. Aurobindo Pharma Limited (AUROPHARMA)
  6. Crompton Greaves Consumer Electricals Limited (CROMPTON)
  7. Vodafone Idea Limited (IDEA)
  8. LIC Housing Finance Limited (LICHSGFIN)
  9. NMDC Limited (NMDC)
  10. Patanjali Foods Limited (PATANJALI)
  11. Petronet LNG Limited (PETRONET)
  12. PNB Housing Finance Limited (PNBHOUSING)
  13. Aditya Birla Capital Limited (ABCAPITAL)
  14. Glenmark Pharmaceuticals Limited (GLENMARK)
  15. Bandhan Bank Limited (BANDHANBNK)
  16. NBCC (India) Limited (NBCC)
  17. Indus Towers Limited (INDUSTOWER)
  18. Manappuram Finance Limited (MANAPPURAM)

Contact Information

Impact Justification

Significant 15% additional margin requirement affects 18 major securities in derivatives segment, directly impacting trading costs and liquidity for concentrated positions.