June 18 (Reuters) – India’s markets regulator on Thursday proposed new measures to better manage risks and broaden funding avenues, as margin trading facility (MTF) volumes show an increase.Here are the details:
• The Securities and Exchange Board of India proposed to broaden funding and collateral flexibility for MTF by allowing traders to raise funds via non‑convertible debentures, and expand eligible collateral, in alignment with the broader cash market
• India’s MTF book has grown sharply in recent years, with outstanding positions reaching about 1.3 trillion rupees ($13.78 billion) by mid‑2026, around 50% higher than a year ago, according to exchange data
• SEBI has proposed clearer caps on broker exposure based on net worth, along with safeguards to protect client funds. It also suggested that any passive breaches at the client level should be resolved within 30 days
• Currently, MTF is allowed only for select stocks and equity ETFs. SEBI is reviewing securities that can be used for margin, collateral, MTF and Securities Lending and Borrowing Mechanism (SLBM), and will issue a separate discussion paper on this
($1 = 94.3325 Indian rupees)
(Reporting by Jayshree P Upadhyay and Anuran Sadhu; Editing by Shinjini Ganguli)
