An additional exposure margin of 15 per cent will be levied on select futures and options (F&O) stocks from the March series onwards, according to a circular released by the National Stock Exchange (NSE) on Wednesday.
The circular says that the stock exchange platform will impose an additional exposure margin of 15 per cent in the equity derivatives segment, in which the top 10 clients account for more than 20 per cent of the market-wide position limit (MWPL).
The F&O stocks to be placed under the additional margin will be selected on the basis of three-month rolling data. The list shall be reviewed on a monthly basis.
The stock trading platform has also released a list of 18 F&O stocks that will face the additional margin with effect from the March series onwards.
These stocks include telecom major Vodafone Idea; pharmaceutical companies Aurobindo Pharma and Glenmark Pharmaceuticals; and private sector lenders Bandhan Bank and RBL Bank. Other notable names on the list are public sector units like NMDC and Steel Authority of India (SAIL), along with companies such as DLF and Manappuram Finance.
These stocks will now face increased trading costs and liquidity constraints. The move is aimed at effectively curbing speculative activities and managing systemic risk.
In the case of securities wherein an additional surveillance margin is applicable, the higher of either the additional exposure margin (15 per cent) or the additional surveillance margin shall be levied, the stock exchange said.
Earlier, prior to this imposition of an additional levy on F&O stocks, NSE had announced the removal of the additional margin levy of 3 per cent on gold futures contracts and 7 per cent on silver futures contracts starting from today.
Both moves contrast with each other and indicate a strategy for efficient management of the market.
The removal and imposition of additional levies is a periodic process in response to changing market conditions.
