Description

Updated list of 40 equity securities approved as non-cash collateral for 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 non-cash collateral for liquid assets. The list contains 40 securities from major companies with applicable VAR-based haircuts. Members can deposit each security subject to a maximum of 25% of total margins, with specific overall and memberwise permitted quantities defined for each security.

Key Points

  • 40 equity securities approved for non-cash collateral component of liquid assets
  • VAR (Value at Risk) based haircut applicable on all listed securities
  • Maximum 25% of total margins can be in any single security
  • Each security has defined overall permitted quantity across all segments
  • Memberwise permitted quantity for CD (Collateral Deposit) segment marked as N.A for all securities
  • Includes major blue-chip stocks across banking, IT, energy, automobile, and consumer goods sectors
  • Highest permitted quantities: HDFCBANK (2.67 billion), ITC (2.50 billion), ETERNAL (1.82 billion)

Regulatory Changes

This circular provides an updated list of approved securities for collateral purposes, superseding the previous list. The revision includes updated permitted quantity limits for each security based on market conditions and risk parameters. The 25% concentration limit per security remains unchanged to ensure diversification of collateral.

Compliance Requirements

  • Trading members must ensure that deposits of any single security do not exceed 25% of their total margin requirements
  • Members must only use securities from the approved list for non-cash collateral purposes
  • Quantity limits (Overall Permitted Qty. Across All Segments) must be adhered to for each security
  • VAR-based haircuts will be applied to the market value of deposited securities
  • Members should monitor the revised quantity limits and adjust their collateral portfolio accordingly

Important Dates

Circular reference: CD72432 Effective date: Not explicitly mentioned in the extracted content; typically effective immediately upon issuance on 2026-01-21

Impact Assessment

Market Impact: Medium - affects liquidity management and collateral planning for all trading members. The inclusion of 40 major stocks provides adequate diversification options.

Operational Impact: Medium - members may need to rebalance their collateral portfolio if current holdings exceed the revised permitted quantities or if previously used securities are no longer on the approved list.

Risk Management: The VAR-based haircut approach and 25% concentration limit help maintain prudent risk management while providing flexibility in collateral deposit options. The large permitted quantities for major stocks like HDFCBANK, ITC, RELIANCE, and ICICIBANK ensure adequate availability for collateral purposes.

Sectors Represented: Banking and financial services dominate the list, followed by IT, energy, automobiles, FMCG, pharmaceuticals, and infrastructure sectors, representing the most liquid and systemically important stocks in the Indian market.

Impact Justification

Routine revision of approved securities list for collateral deposit with updated quantity limits. Affects margin requirements for trading members but is part of regular operational updates.