look news india
Mumbai, Ahmedabad: To protect the interests of small investors, retail traders, trading in futures and options (F&O) is discouraged and difficult for this sector, capital market regulator SEBI has become alert and is now considering increasing the lot size drastically. Exchanges are also F&O. Measures have been taken to make trading more difficult as well as to protect it.
The National Stock Exchange (NSE) has reduced the list of securities allowed as collateral for margin required by clients for intra-day or derivatives (F&O) trading by Rs 1,000.
1010 securities with relatively low turnover or high impact cost have been removed from the list of 1730 approved securities by NSE Clearing Corporation. Hence these 1010 securities will no longer be accepted as collateral. This will now restrict the pledging of securities for F&O and intra-day traders.
It may be mentioned here that at least 25 unlisted securities have a market capitalisation of over Rs 20,000 crore. The stocks that have a higher market capitalisation and have been delisted include Adani Power, Yes Bank, Suzlon, Paytm One97 Communication, HUDCO, Bharat Dynamics, Go Digit General Insurance and many more.
The clearing entity will now clear and accept as collateral from August 1, 2024, only those shares that have traded on 99 per cent of the days in the last six months and have an impact cost of up to 0.1 per cent for an order value of Rs 1 lakh, an NSE circular said.
The practice of pledging portfolio shares for intraday trading or futures market trading in the stock market has increased significantly these days.
Margin is created by pledging shares and based on this, trading is done in the futures market. If the price of pledged shares falls, then more shares have to be pledged or there is a fear of selling the borrowed goods.
There is a lot of concern in the market about valuations and if the water of the Ganditur tsunami seen in small stocks subsides, then there is a fear of investors being disappointed, so as a precaution, NSE has tightened the rules for share pledge.
NSE Clearing Limited will no longer settle securities with low trading activity or high impact costs. This change will eliminate 1010 securities from the 1730 stocks that can be pledged as collateral. According to market experts, the margin trading facility is currently worth Rs. 73,500 crore and may cost around 15-20 per cent.