SEBI Updates Timelines for Margin Collection in Cash Segment

The Securities and Exchange Board of India (SEBI) has issued a circular bearing number SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/57 dated April 28, 2025 mandating revised timelines for the collection of margins (other than upfront margins) by Trading Members (TMs) and Clearing Members (CMs) in the cash segment, aligning it with the T+1 settlement cycle. This circular modifies certain provisions of the Master Circular for Stock Brokers issued on August 9, 2024.

Previously, TMs/CMs had up to T+2 working days to collect margins (other than upfront VaR margins and ELM) from their clients. However, with the shift to a T+1 settlement cycle for all scrips from January 27, 2023, SEBI has now stipulated that these margins must be collected by the settlement day itself.

Key changes include:

• TMs/CMs must mandatorily collect upfront VaR margins and ELM before trading, and other margins by the settlement day.

• If the client completes the pay-in of funds and securities by the settlement day, other margins would be deemed collected, and no penalty will be levied.

• If the client fails to make the pay-in and the TM/CM does not collect margins by the settlement day, penalties for short/non-collection will apply.

  
  

SEBI’s initiative to align margin collection timelines with the T+1 settlement cycle reinforces its commitment to enhancing market discipline and investor protection. By tightening risk management norms, the regulator aims to ensure a more resilient and efficient market infrastructure.