Risk Managament

Position Limits

The transactions done in the SLB segment are subject to position limits as may be specified by SEBI, ICCL and/or BSE from time to time. ICCL monitors the position limits of the participants from time to time.
Violation of such limits shall attract action as specified by ICCL from time to time.

Market-wide Position Limits

The market- wide position limits in terms of the number of shares for the SLB transactions shall be 10% of the free-float capital of the company i.e. 10% of the number of shares held by non-promoters in the relevant security.

Participant-wise Position Limits

The participant-wise position limits for the SLB transactions in a security shall be lower of:
  • 10% of the market -wide position limits (in terms of number of shares)
  • INR 50 crores in value.

Client-level Position Limits

The specific client-level position limits for a security shall not be more than 1% of the Market -wide position limits.

Position Limits for Institutional Investor

Position limits for the SLB transactions in a security shall be lower of:
  • 10% of the market-wide position limits (in terms of number of shares)
  • INR 50 crores in value.
Position Limit communication to Market

ICCL computes and specifies the relevant Position Limits on the last trading day of every month which are applicable for the next month.

Liquid Assets

The liquid assets for trading in equity futures and options contracts are to be maintained separately in the Equity Derivatives Segment.

1.1 Composition of Liquid Assets

Eligible Collateral Hair-cut Concentration Limit
Cash Component: Cash & Cash Equivalent
Cash No haircut No Limit
P1 (or P1+) rated Bank Guarantee ("BGs") No haircut Limit on the Exchange's exposure to a single bank as stipulated by SEBI
Bank Fixed Deposits Receipts ("FDRs") No haircut No limit
Units of liquid Mutual Fund (or) Govt. Sec. Mutual Fund (by whatever name called which invests in government securities) 10% No limit
Government Securities and T-Bills 10% No Limit
AAA rated Foreign Sovereign Securities 10% 10% of cash component of liquid assets
Non- Cash Equivalent
Liquid (Group-I) Equity Shares (as per the criteria for classification of scrips on the basis of liquidity). (Only A and B1 group securities forming part of Group I) VaR margin for the respective scrips Limits specified for each scrip
Mutual Funds (other than those listed under cash equivalent) VaR Member wise and overall limits specified for each scheme
Gold ETF VaR No limit
AA (or higher) rated Corporate Bonds 10% Limits specified for each issue and total not to exceed 10% of the total liquid assets of the member

List of eligible securities and mutual fund units is available on web link
  • The cash/cash equivalent component should be at least 50% of the total liquid assets.
  • Hence, non-cash equivalent component in excess of the total cash/cash equivalent component would not be considered as part of Total Liquid Assets.
  • Further, the Liquid Assets deposited in form of cash equivalent and non-cash equivalent are subject to the norms in respect of applicable haircuts, single bank and single issuer exposure limits, etc. as per the guidelines issued by Securities and Exchange Board of India (SEBI), BSE and ICCL as well as any other circulars/guidelines that may be issued in respect of the same from time to time.
1.2 Minimum Liquid Asset

  • The Clearing Member shall meet with the minimum liquid assets requirements prescribed by ICCL at all points of time.
  • The Clearing Member's liquid net worth after adjusting for the initial margin and extreme loss margin requirements must be at least Rs. 50 Lakhs at all points in time.
  • Accordingly, every Clearing Member would be required to maintain Minimum Liquid Networth of Rs. 50 lakhs with ICCL. At least Rs. 25 lakhs of MLN should be in form of cash/Cash equivalent and the balance in form of Cash/Cash equivalent/non-cash equivalent.
Additional Liquid Assets
Clearing members may deposit additional liquid assets in at any point of time based on the composition of Liquid Assets as detailed in above.

1.4 Procedure for submission of deposits towards Liquid Assets

Cash Deposits:

For enhancement of cash collateral towards liquid assets, the Clearing Members need to send their online instruction in respect of same through the on-line web-based facility BEFS Module to their respective Clearing Banks for confirmation of such request for enhancement of cash collateral.

Alternatively, in case of any contingency the Clearing Members and their designated Clearing Banks may at their discretion avail the facility of manual updations of cash collateral. For this purpose, the members may instruct their Clearing Banks to confirm the cash collateral deposits to the ICCL through written mode viz. Fax, letters or email. Based on such written confirmations received from the Clearing Banks, the cash collateral deposits of the members will be manually updated in the system by the ICCL.

Fixed Deposit Receipts (FDRs)

ICCL will accept the instrument along with the letters if the same are in order and provide the benefit in respect of same to the concerned Clearing Member after confirming the details of the said instrument with the issuing bank.

  • Renewal of FDRs: Clearing Members may renew the FDRs deposited towards Liquid Assets by submitting a renewal letter from the concerned bank along with a covering letter by the Clearing Member in the prescribed format
Bank Guarantee (BGs)

Clearing Members can deposit bank guarantee(s) with/without the claim period. In such cases i.e., where bank guarantee(s) are submitted without a claim period, the amount of the bank guarantee(s) would be removed from the liquid assets of the member at least seven days before the expiry date of the bank guarantee(s) or other such period as may be specified by ICCL from time to time.

  • Renewal of BGs: Clearing Members may renew the BGs deposited towards Liquid Assets by submitting a renewal letter from the concerned bank along with a covering letter by the Clearing Member in the prescribed format to ICCL.
  • Facility of reminder emails on matured instruments: ICCL sends reminder emails providing details of the instruments getting matured in the near period to the email ids registered in the BEFS module. Clearing members are, however, advised to submit the renewal instruments within the stipulated period to avoid any hardship.

  • Eligible securities and units by way of pledge towards Liquid Assets: Clearing Members can deposit eligible securities and units in dematerialised form towards liquid assets by way of pledge. ICCL on a periodic basis communicates the list of eligible securities and units to its clearing members. These securities and units shall be pledged in favour of ICCL to the designated depository accounts maintained with the approved custodians in this regard.

    The valuation of the securities and units deposited towards Liquid Assets shall be in accordance with the norms and limits as prescribed by the ICCL from time to time. The valuation of securities and units will be done on a periodic interval by ICCL and benefit to the extent of net value of the securities/units after haircut, as may be prescribed by ICCL from time to time, shall be considered.

    ICCL may revise the list of approved securities/units and the norms in respect of same from time to time. Clearing Members shall regularly monitor their valuation of securities/units lying towards Liquid Assets and replace/replenish the same based on the revised list of approved securities/units and change in norms. Clearing Members shall also ensure that only eligible securities are pledged and lying towards their Liquid Assets with ICCL and that the said securities are not subject to any lock in period, buy back scheme any charge or lien, encumbrance of any kind, or such other limitations or title is questioned before the court or any regulatory body.
  • Procedure for availing pledging of demat securities/units towards Liquid Assets:

    Clearing Members can initiate pledging of securities/units in favour of ICCL for deposit of same towards their Liquid Assets, and requisite benefits in respect of same shall be provided by ICCL on confirmation of the pledge by its custodian.

Government of India Securities towards Liquid Assets

Clearing Members may deposit eligible securities in form of Central Government of India Securities (G-Sec) and Treasury bills (T-bills). The list of such eligible securities shall be communicated by ICCL.

Clearing Members shall ensure that only eligible G-sec and T- Bills are pledged and lying towards their Liquid Assets with ICCL and that the said securities are not subject to any lock in period any charge or lien, encumbrance of any kind, or such other limitations or title is questioned before the court or any regulatory body.

1.5 Procedure for submission of release request of Liquid Assets:

Clearing Members having active membership status can place their on-line request for release of Liquid Assets lying with ICCL by login through specific user-ids and passwords into CLASS collateral module provided to them. Such requests may be considered by ICCL, subject to no lien being exercised by ICCL pursuant to the applicable Rules, Byelaws and Regulations and subject to the availability of the collateral after adjusting for due fulfillment of all obligations and liabilities arising out of or incidental to any deals made by such clearing member/trading member or anything done in pursuance thereof.

Clearing Members can log in to the web-based CLASS Collateral Module and submit their release requests of collateral/s available collaterals for release.

1.6 Transfer of collateral from one trading segment to another trading segment

Clearing Members can transfer collateral across trading segments, online, to the extent of the amount of collateral lying unutilised towards margins or idle in the trading segment from which it is intended to be transferred.

In case of collateral lying in form of bank guarantees issued by banks the same would be available for transfer from one trading segment to another, only after submission of letter from the concerned bank regarding transfer of scope of the bank guarantee in the prescribed format, to ICCL.

The evaluation of collateral transfer across the segments will be subject to hair-cut and other criteria/norms in respect of the concerned segments as specified by SEBI/BSE/ICCL in this behalf from time to time.


1.1 Margining Process

All Participants in the SLBS shall be margined based on their transactions in the said segment. ICCL would compute, collect and release various margins as detailed below

Lend transactions on T day
The lend transaction shall be levied a fixed percentage of the lending price as margin. The fixed percentage will be 25% (as currently applicable), or as may be specified by ICCL from time to time. No margins will be levied on the lender in case of early pay- in of securities. The lend transaction shall also be subject to mark to market margin at end of day.

Borrow transactions on T day
The borrow transactions shall be levied a fixed percentage of lending fees as margins on T day. The fixed percentage shall be 100% or as may be specified by ICCL from time to time.

Margins on return leg of SLBS transaction
The borrower shall be levied following margins on return leg of their borrow transactions
  • Value at Risk (VaR) Margin
  • Extreme Loss Margins(ELM)
  • Mark to Market margins (MTM)
  • Lending price (i.e. value of shares borrowed)

No margins shall be levied on the lender Participant in the return leg transaction.

1.2 Computation and collection of margins on SLBS transactions

Lending Fees

Lending Price

VaR Margin and ELM Margin

MTM Margin

  • MTM margin shall be calculated, by marking each transaction in a security, to the closing price of the security, at the end of the day, in the Equity Cash segment of BSE. In case the security has not been traded on a particular day in the Equity Cash Segment, the latest available closing price at the BSE shall be considered as the closing price.

  • MTM shall be collected every day at end of day on the gross open position of the Participant. The gross open position for this purpose would mean the gross of all positions across all the clients of the Participant including its proprietary position. For this purpose, the position of a client would be netted across its various securities and the positions of all the clients of a Participant would be grossed.

  • Such MTM would be collected from the Participant in the evening, first by adjusting the same from the available cash and cash equivalent component of the Liquid Assets and the balance MTM in the form of cash from the Participant through their clearing banks on the same day.

  • There would be no netting off of the positions and setoff against MTM profits across two settlements. However, for computation of MTM profits/losses for the day, netting or setoff against MTM profits would be permitted.

  • The MTM margin so collected shall be released on completion of pay-in of the respective settlement.

Participants may note that all end of day margin and other cash obligation need to be cleared by them before start of business on the next transaction day, failing which no fresh transactions would be allowed to be executed in the order matching platform.

Margins pertaining to Custodial transactions

  • In respect of transactions entered by a Participant which is to be settled by a Custodian, the margins from the time of transactions till confirmation of same by the Custodian shall be levied on the Participant. On confirmation of the said transactions by the Custodian, the Custodian shall be levied the margins applicable on such transactions.

  • In case of rejection by the Custodian, the margins on the transaction rejected shall continue to be levied on the Participant.

1.3 Exemption from Margins

The exemption from margins would be given in cases where early pay-in of securities is made. Participants have the facility to do early pay-in of securities prior / after execution of the transaction pertaining to the respective leg.

1.4 Release of Blocked Margins, Lending Fees and Lending Price:

The blocked margins, Lending Fees and Lending Price would be released on completion of Pay-in of respective leg of transactions and on early pay-in / early return of shares.

1.5 Margin Short fall

Participants shall maintain adequate liquid assets with ICCL at all points of time to cover their margin requirements. In case of shortfall in margin for borrower transactions, ICCL shall cancel the borrow transaction to the extent of margin shortfall as may be decided by it from time to time. The securities shall be returned to the lenders along with the lending fees.
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