NSE and BSE on Thursday issued a clarification on Margin Trading Facility (MTF).
The note said that a media report stating that 1,010 stocks will be expelled from the list of collaterals acceptable as margin pledges for availing MTF from clearing corporations effective November is not correct.
“This is factually incorrect. No such circular was issued by SEBI in October, and no large-scale changes have been made recently to the list of securities on which MTF can be offered,” the note said.
As per the current regulatory framework, MTF is provided by trading members to their clients in stocks and exchange-traded funds that are part of the Group I list of securities issued by Clearing Corporations. The list of Group I securities is computed based on objective criteria of impact cost and the same is updated every month and published by exchanges on their websites. As per this, currently around 2,000 securities form part of Group I.
“Contrary to the article’s claim, there has been no reduction in the number of securities eligible for MTF. Further, acceptance of collaterals by clearing corporations is based on the risk-based objective approach to manage the efficiency of risk management and clearing and settlement. There is no scrip-specific discrimination that is exercised while updating the list of acceptable collaterals on periodic basis,” the note added.
Lending under MTF went up in October to a record high of over ₹80,500 crore.